Net Worth $1.6m @ 51 I don't feel rich - explain that!

[wildcat]

Rich to me brother! Donations accepted. Write checks out to the Wildcat Foundation, preferably blank with a ceiling of 1.6 mil.

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.

Nords is right on as usual, my thoughts.

 

[HFWR]

Assuming about 5% real return between here and 2013-14, I'll retire with a port 1/2 as big...  

Between that (say about $2800 mo), SS at 62 of ~$1300mo (I forget the real number, but that sounds right...), and employer-assisted health insurance...  

Of course, I'll still have a mortgage pymt............................  

Yeah, I can do it!!   8)

Maybe when JG moves to TX full time, he can teach me his credit card scams techniques...  

 

[brewer12345]

Texas Rich

How can I get the annuity you are talking about?  What are the pros and cons. 

See for yourself about payouts: http://www.immediateannuities.com/

I put in $1.6MM for a 50 year old male in my state asking for a single life annuity and got a quote for over $8k a month.

The downsides are:

- You are vulnerable to inflation
- When you croak, there is no pot of money for your heirs
- You are in trouble if the insurer goes bust, so choose carefully.

 

[Mr._johngalt]

Assuming about 5% real return between here and 2013-14, I'll retire with a port 1/2 as big...  

Between that (say about $2800 mo), SS at 62 of ~$1300mo (I forget the real number, but that sounds right...), and employer-assisted health insurance...  

Of course, I'll still have a mortgage pymt............................  

Yeah, I can do it!!   8)

Maybe when JG moves to TX full time, he can teach me his credit card scams techniques...  

Does not look like we can do it "full time", although we might some day.

The credit card "techniques" are simple math. If you can borrow at -0- %
and invest the money at 4%........well, it doesn't take a lot of
brainpower.

JG

 

[HFWR]

True enough...although I've never seen one without a 3% fee for a cash advance...

 

[wildcat]

After inflation 0 -1 % Why bother?

 

[JWR1945]

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

Thoughts?

So what will I do? I will tell you something more about the financial side of Retiring Early.

It may help your thinking if you determine what your $1.6 million means as an income stream.

I have written a couple of articles that you might find useful. They identify baseline amounts that you can withdraw with absolute safety for 40 or 50 years. They consist of TIPS and/or ibonds exclusively.

The articles also suggest ways to augment your income with almost as much safety. They add stocks under favorable circumstances.

All of my numbers include adjustments that match inflation. This is different from many annuities and pensions.

My articles are my responses in the Letters to the Editor section of my web site:

I Bonds versus TIPS
http://www.early-retirement-planning-insights.com/letters101105.html

From A Novice in Investing
http://www.early-retirement-planning-insights.com/letters091805.html

Figure out your actual needs first. Compare them with these baselines. I think that you will be happy. Then you can begin your actual planning.

Have fun.

John Walter Russell

 

[brewer12345]

Uhoh. Looks like the straps have been loosened on the straitjacket...

Prepare for frontal assault. Thorazine, stat!

 

[Mr._johngalt]

True enough...although I've never seen one without a 3% fee for a cash advance...

Almost all are "capped".  The most I ever paid was $75 and lately
I can even negotiate that downward.

Consider this.  Let's say I have 12 cards.  At any one time, maybe 5 are
offering "promo" rates.  Then let's say I have $100,000 in credit limits
on just those 5 (20K each).  Okay, I take all the money and pay
$75 X 5 = $375.00 in fees.  Then, I invest the 100K at 4% for 6 months
which will amount to a bit less than the full $2000 as you are paying the CC
companies back (with their own money).  In my case, I pay no taxes,
so it is kind of the ultimate no-brainer.  Oh sure, you need to do some basic
math, pay on time, know when the promo rate expires. As lazy as I am,
I can still do this easily.

JG

 

[justin]

After inflation 0 -1 % Why bother?

You're ignoring the effect inflation has on the underlying principal you borrowed from the CC. Say you borrow $10k. That amount decreases in real terms year after year due to inflation.

 

[Martha]

Dex, is your feeling a bit of cold feet? If I remember, you planned to retire this year and then put it off to next year. Maybe you are like me and just can't get comfortable with it?

 

[dex]

Thanks for the replies. Belive me when I say that these are real thoughts and feelings when I post ideas such as this and I do not have the answer.

I'm happy that this post is generating such good dialog - I find it wanting sometimes.

ReWahoo - I have a very detailed spread sheet(s) of current expenses and estimated expense after RE. I estimate I want $45K after tax income. I also ran the calculators.

youbet - good insights - I'll think about them

Honkie - 15yrs younger and more money! Thanks for making me feel "good".

BUM - Money is only one part of the equation - I agree. But, it is one of those things - If I won the lottery no doubt about retiring.

Unclemick2 "in other areas have obvious emotional/what's the right Huh?way to put it content - which are important for us - in our ER - which another would do different." definatly a factor - That is what make all the questions about do I have enough money mostly a useless question. I didn't put my statement out that way because I know I have enough

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."
Put that in context of the world. About 2 billion people in this world live on one meal a day.

Andre1969 - My net worth is currently in short term income generating instruments.

Martha - "Dex, is your feeling a bit of cold feet? If I remember, you planned to retire this year and then put it off to next year. Maybe you are like me and just can't get comfortable with it? "
Martha - I've taken all the physicals I can think about. I sold my home and am living in an apartment. I'm working toward RE in April of next year. And yes I am getting cold feet. I'm on vacation this week.

Let me tell you a little story. I'm makeing about $150K in an easy job - I don't hate it as do many. It is just that I know I don't have to work and I know there is so much more to life. You know the story about getting old and regretting etc. I've mentioned my upbringing.

Now add to the above the following. I read a story today about a guy I knew who is the CEO of FOX News Networks and now the FOX stations division. And I'm thinking to myself with a little work I could get to a position similar to his, be earning great money etc. But I don't really want it in my hart but the thought is there. Just like the thought is there that I could work a little more, have more money or buy a nice house etc. I could do this if I made the commitment to do it.

Then I think life is short. Do I want to be old, have money and not be able to do the things I want?

It is not easy to break old patterns of behavior. When people say it isn't about the money the quick come back is - yea right. When the trade off is between age and money; it really isn't about the money.
Then again, I sometime think I'm a romantic or a fool.

Saw a good movie today - Elizabethtown - makes you thing about what people will say when you die!
On that note ... Goodnight Gracie

 

[oldcrowcall]

When I was growing up in the late fifties there was a TV program called "The Millionaire".  A million was a big deal  back then-that was considered extreme wealth. Today, if they did that program it would have be $6,500,000 to be comparable. Methinks millionaires  8) today are fairly common .

 

[MasterBlaster]

Well if you believe in the 4% SWR then $1.6M will get you $64k pretax income forever. In my spreadsheet with Ca. taxes that gives you just over $4600 a month in after tax income.

Also I assume that Social Security may kick in one day so factor that in.

So basically - you are there. Maybe you'd want to work a little more just to feel a little safer.

It's up to you from here. Retire if you want. Keep working if you want.

Keep working and live a little larger...
Keep working and save some/spend some...
Retire now...

It's your life and it's your call.

For what it's worth, I'm in a very similar position and have decided to keep working, at least for now.

 

[greenhm]

How to feel rich with 1.6 million dollars

1. Travel or move to any developing country
2. Become one of the > 99% of the population
3. Feel what loosing it all in a horse race is like.
4. Keep poor friends

 

[TromboneAl]

Very good point about "If I worked a little more, I could make a lot of money."

I sometimes think "If I spent a few months doing a new release of my product, I could probably bring in $200,000 in upgrades..." I don't want the hassles of that (hard work, worrying about bugs, etc.), but by not doing it, it sometimes feels like I am giving up free money.

That is, you might feel guilty that you'd be giving up the chance to make a lot of money with just a little extra effort.

 

[Texas Proud]

See for yourself about payouts: http://www.immediateannuities.com/

I put in $1.6MM for a 50 year old male in my state asking for a single life annuity and got a quote for over $8k a month.

The downsides are:

- You are vulnerable to inflation
- When you croak, there is no pot of money for your heirs
- You are in trouble if the insurer goes bust, so choose carefully.

Thanks brewer for answering the question for me... and that is the site I used

 

[retire@40]

Very good point about "If I worked a little more, I could make a lot of money." 

I sometimes think "If I spent a few months doing a new release of my product, I could probably bring in $200,000 in upgrades..."   I don't want the hassles of that (hard work, worrying about bugs, etc.), but by not doing it, it sometimes feels like I am giving up free money. 

That is, you might feel guilty that you'd be giving up the chance to make a lot of money with just a little extra effort.

If there where an unlimited number of dollar bills spaced apart a few inches from each other on the ground in front of you and you could pick up as many as you wanted, chances are that there would come a point where you just could not bend over anymore and pick them up, even though that road of bills continued as far as your eyes could see.

At some point you just have to say enough is enough.

 

[TromboneAl]

Yes, and as you go along the bills get closer together.

 

[SteveR]

Yes, and as you go along the bills get closer together.

But at some point you just cannot carry any more; your pockets are full, your arms are full and the desire to keep picking them up just fade away with the thoughts of having to carry all that weight and bulk.

Now if you had a vacuum cleaner......

 

[Texas Proud]

If there where an unlimited number of dollar bills spaced apart a few inches from each other on the ground in front of you and you could pick up as many as you wanted, chances are that there would come a point where you just could not bend over anymore and pick them up, even though that road of bills continued as far as your eyes could see.

At some point you just have to say enough is enough.

Now if you are smart.. you pick up enough to go hire some 'day workers' and have them pick them up for you.... and you do not have to say enough is enough.. yea, you do have overhead now, but you still make a profit

 

[justin]

Now if you are smart.. you pick up enough to go hire some 'day workers' and have them pick them up for you.... and you do not have to say enough is enough.. yea, you do have overhead now, but you still make a profit

You're guns are quicker than mine. I had this exact same idea!

 

[retire@40]

Now if you are smart.. you pick up enough to go hire some 'day workers' and have them pick them up for you....  and you do not have to say enough is enough.. yea, you do have overhead now, but you still make a profit   

You better use some of the money you picked up to pay for a large workers comp policy in case those "day workers" decide to take a spill and hurt their backs. And then what are you going to do when the insurance company won't renew your policy because of the claims?

 

[justin]

You better use some of the money you picked up to pay for a large workers comp policy in case those "day workers" decide to take a spill and hurt their backs. And then what are you going to do when the insurance company won't renew your policy because of the claims?

Set up a shell corp with no assets to employ the illegals, then skip the country with your loads-o-loot. Cayman Islands are nice this time of year, no?

 

[Nords]

That is, you might feel guilty that you'd be giving up the chance to make a lot of money with just a little extra effort.

Hey, if that was my life philosophy then I wouldn't be an ER. I'd be a GS-13 teaching nuclear engineering and spending a midwatch or two in shipyard helping log calorimetric data. Just another wild & crazy guy chasing an $80K/year paycheck.

Oh, yeah, I guess I'd still have to make the time for that family, yardwork, & home maintenance stuff. Then there's all the effort frittered away on surfing & reading. Damn, what a waste of good leisure hours.

For me the cost of working became higher than any expected profit. Especially if working kills you erodes your lifespan. However I don't mind a bit picking up pennies & cans while I'm strolling the neighborhood.

You better use some of the money you picked up to pay for a large workers comp policy in case those "day workers" decide to take a spill and hurt their backs.

Wouldn't it be easier to pay a cut to the guy who's laying down the bills in the first place for him to deliver them directly to your bank account? Oh, wait, we call that a "pension."