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$1,000,000 and the clothes on your back
Old 10-28-2004, 06:08 PM   #1
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$1,000,000 and the clothes on your back

Is that enough to do what you want to do forever and ever?

If so what would you do beginning tomorrow.

If not why

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Re: $1,000,000 and the clothes on your back
Old 10-28-2004, 06:16 PM   #2
 
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Re: $1,000,000 and the clothes on your back

I do not have a million and will never have a milllion.
If you gave me, oh say $250,000, and the clothes on my back, I would be fine and my life would not change much. I think this is a major difference in me and the
other posters here. I see so many who need
1 million, 2 million. 3 million or a bazillion dollars
before they even consider retiring, Truly, I feel sorry
for these people.

John Galt
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Re: $1,000,000 and the clothes on your back
Old 10-28-2004, 08:04 PM   #3
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Re: $1,000,000 and the clothes on your back

Quote:
Is that enough to do what you want to do forever and ever?

If so what would you do beginning tomorrow.

If not why
That's just about what I would need for the next 40 to 50 years. I'm in my mid 30s and I've been semi-retired for the past few years. I plan on cutting back even more when I hit 40. For me it's not a cold-turkey retirement, and I don't have any plans for a retirement party, and I'm not advertising my ER to friends and family (besides my wife).

So, what I would do the day after I hit $1mil is just more of what I've been doing in the years leading up to that point. I have many interests that easily fill up my day with things most people just dream of doing while they are stuck in the morning traffic going to an office meeting they hate or sitting in a cubicle all day or trying their hardest to please their daytime owners (aka boss).

I like learning new things every day, so going to the library and various museums is stimulating. I like walking and I have plenty of scenic areas near my home to do so. I love eating fresh food every day and I love to cook, so some days I spend preparing great meals for my family to enjoy together. I love doing things with my son so I have lots of quality time with him playing catch, going to the park, going on picnics during warm summer days, taking him to the zoo, and lots of other things many career-oriented parents regret doing when their children grow up. I like to have cookouts with friends and neighbors. I like to listen and to play music. I like growing my own fruits and vegetables. I like to make beer, wine, and other alcoholic beverages. I like watching sporting events, fixing things around the house, washing my car, watching a good movie on TV, searching and learning things on the Internet, going to the beach, fishing, kayaking, oil painting, rollerblading, smoking cigars, going to feasts and banquets, going whale watching, and going on cruises and vacationing with my family both locally and in other countries.

In fact, the more things I do, the more things I realize I want to do, so my list of things-to-do keeps growing even as I cross them off. Life is WAY to short to wait until age 65, or even 55 in many cases. I'm glad God gave me enough brainpower to realize this before I am too old and regret not doing the things many people retiring in their 60s wish they had done.
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Re: $1,000,000 and the clothes on your back
Old 10-28-2004, 08:28 PM   #4
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Re: $1,000,000 and the clothes on your back

Yeah, I guess its hard for those of us with working wives who are paying the bills to see the need for a million bucks.

Lets see...a million bucks and the clothes on my back.

I'd quit work.

I'd invest it.

Then...

I'd do exactly what I'm doing right now!
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Re: $1,000,000 and the clothes on your back
Old 10-28-2004, 09:10 PM   #5
 
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Re: $1,000,000 and the clothes on your back

$1M and the clothes on my back will be a fairly accurate discription of my circumstances when I retire in 3 years at age 58. Having virtually no tolerance for risk, I intend to invest the entire balance in TIPS. That should spin off about $25K per year, and still (more or less) protect the principle against inflation. Although I respect and admire those who have retired with smaller nest eggs, doing so entails too much risk for my comfort. I feel that $25K is a minimum figure for my wife and I to live modestly, but confortably. In a nutshell, "$1M and the clothes on my back" equals a modest lifestyle, peace of mind, and the freedom to finally say that my time belongs to me.
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 06:01 AM   #6
 
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Re: $1,000,000 and the clothes on your back

Want to tweak my previous post a little. In my case
(with a working wife TH ) and at age 60 with
SS on the horizon, surviving with $250,000 is really doable,
so I was not joking (maybe a little hyperbole). However,
if you are 30, or 40 , or even 50, it's a different deal.
I was telling my spouse just yesterday that (absent
runaway inflation) after I am drawing SS, she will
not be all that far away, and combined those monthly checks (plus what we already have) should put us in good shape indeed. She was not impressed as she never plans that far ahead. It's ironic that at 30 and 40
I did no long range planning, but now at 60, I'm
working over all the scenarios daily (if only in my head).

John Galt
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 06:44 AM   #7
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Re: $1,000,000 and the clothes on your back

[quote author=Cut-Throat link=board=lifestyles_board;num=1099012120;start=0 #6 date=10/29/04 at 09:31:

I'd have to convince my wife to get a trailer on a Montana River and become a Trout Bum. *8)


Cutthroat: You may be on to something. Buy another small trailer (for the winter), and live on the Colorado River, near Laughlin Nevada for your winter fishing
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 07:27 AM   #8
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Re: $1,000,000 and the clothes on your back

This "hypothetical" situation would give you $1 million and the clothes you are currently wearing. Thats it!

No pension, no home, no furniture, no cars, no medical insurance, no other assets or income.

If one was to keep his home and possessions the equity would be deducted from the million.

We would receive Social Security and Medicare when we are eligible. (Hopefully).

It's alot of bucks but I think it may be a challenge for some people. If I had the million I would be able to do it but I would have to be careful.

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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 09:20 AM   #9
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Re: $1,000,000 and the clothes on your back

No way would I have considered ER with $1M and the clothes on our backs. We ER'd with $1M PLUS a paid off house, two cars (no car payments), inflation indexed pensions, and a planned lifestyle based on $90k per year. We have every intention of enjoying some of the finer things in life we didn't have while my wife stayed home raising two kids, sending them to colllege and saving for retirement. We intend to fully fund the college costs of any and all grandchildren (if our kids would get busy and have us some!). $1M and the clothes on our back would not allow that.

I think you may be scaring some of the younger folks on the board into thinking that a very comfortable ER is not achievable.

Grumpy
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 09:34 AM   #10
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Re: $1,000,000 and the clothes on your back

I am trying to do just that! $1.2m Post Tax and $340 Pre Tax and at the moment we have no home and a cheap car. By the time you add accommodation and a fixed income return, it is pretty tight. If interest rates were 4+% for 1 year it may be somewhat easier but not at 2%!. Unless you live in a vaccum it cost about $25k PA to live modestly, Rent is about $600 - $900 per month for IMHO.

If I could make a suggestion, can responses include how one would do it? Where would one invest and what accommodation would one have?

SWR
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 09:49 AM   #11
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Re: $1,000,000 and the clothes on your back

I could do it but the wife wouldn't go for it. With everything paid for we would still need $4000 to $5000 a month to feel secure. Maybe more depending on health care. We live in the midwest so our housing cost arnt as high but the house we live in now is still probably worth 250 to 275K.

I would buy a sailboat to cruise on during the winter and a trailer or cabin in the woods for the summer. A million would be plenty for this. The problem is Ive had the wife for 25 years and she is higher maintenence. And since she has contributed over the years to our nest egg she gets a say in the retirement plans.
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 10:57 AM   #12
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Re: $1,000,000 and the clothes on your back

I could do it. That's more than my net worth right now, so it'd be an increase. I'd give notice today!!!
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 10:59 AM   #13
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Re: $1,000,000 and the clothes on your back

Well, for me $1M and the clothes on my back would be a piece of cake, I could do it well probably on half that, but then again, I'm single, which makes a big difference. My house cost me $60k, and it's only worth about $120k today or so, so I would stay there. Furnishings amount to pretty much nothing. Car is worth about $10k, Motorcycle is worth about $10k, and then I would have the rest to invest. So, I have $860k now to invest, I'd probably do 50% total stock market and 50% total bond market and forget about it. I need about $24k including medical insurance cost to live quite well, which is about 2.8% of this portfolio. Voila, I'm done ! With all the extra $$ I would continue my hobbies which would probably throw me back a few more $$, etc etc.
$1M and the clothes on my back is a piece of cake, $500k and the clothes on my back would be quite comfortable. John Galt's $250k and the clothes on my back would have me working some.....
Of course, once again, I am single, I am not risk averse, and I don't own a $500k house.
Just my $.02.

-Pan-
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 11:42 AM   #14
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Re: $1,000,000 and the clothes on your back

Quote:
And since she has contributed over the years to our nest egg she gets a say in the retirement plans. *
Even if she hadn't contributed one thin dime, she had better have a say in the plans, becaue she has a veto. It's called divorce, and can really make your retirement less comfortable
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 12:05 PM   #15
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Re: $1,000,000 and the clothes on your back

I could do it. It would involve some changes, but I think it would be doable.
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 12:34 PM   #16
 
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Re: $1,000,000 and the clothes on your back

Great topic!

It's all a matter of perspective. For example, with 250K
(and the clothes on our backs) plus ONLY our SS checks starting at 62, I don't see that we would have any trouble at all. In 1993, when I semiretired (I know,
I know, that's not really retirement) I am pretty sure
our combined net worth (this is with wife No. one)
was not much over 250K. I was 49 and paid no attention to net worth, SWR, or portfilio distribution.
Just quit. Eleven years later, my net worth is up significantly (even after my divorce) and I drew my last paycheck in June, 1998. I post this so that the wannabees will not be discouraged. Motivation is
everything. The million bucks is a distant second.

John Galt
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 01:26 PM   #17
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Re: $1,000,000 and the clothes on your back

It should be up significantly. Of course 250K in 93' is worth quite a bit more than it is in 04'.
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 01:51 PM   #18
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Re: $1,000,000 and the clothes on your back

$250,000 in 1993 is the equivalent of about $328,000 in 2004 (depending on which calculator you use). I wouldn't retire with $328,000 and the clothes on my back today. That would take more guts than I have.
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 02:26 PM   #19
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Re: $1,000,000 and the clothes on your back

Quote:
*Motivation is
everything. *The million bucks is a distant second.
John Galt
This is nice, but incromprehensible to me. Must be part of the Galternate Universe. Motivation is important but far from everything if what you are trying to do is sell real estate, or mutual funds, or insurance.

But the only place I can see motivation playing much part in retirement affordability is the motivation to prefer privation over work. What else can motivation do? It can't increase returns, it can't lower prices of necessities, it can't make a cold house warmer, or a hamburger taste like steak.

I tell you what, I'll give you my motivation squared, and you give me a million bucks. Then I will be really comfortable, and I don't think think I will miss the motivation at all.

There are a whole bunch of people who work little, and live cheaply. They are called poor, and historically they have not appeared to be happy.

Mikey
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Re: $1,000,000 and the clothes on your back
Old 10-29-2004, 02:39 PM   #20
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Re: $1,000,000 and the clothes on your back

I think one (+ SO) can retire on $1m in Cash providing you have a paid for home. That would be practical in todays market environment.

$1m @3% = $30k - 10% for Taxes (optimistic) leaves $27k

A modest home will cost about $7k - $10k per year to run. So the $27k + a little SWR should be fine. But better not risk any of it in the stock market.


SWR
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