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pb4uski · 03-22-2019, 04:38 AM

Quote:

Originally Posted by Offgrid Organic Farmer

... My home value is X0.2 my annual pension income. ...

Huh? If your home is worth $100k then your annual pension would be $500k... $500k X 0.2 = $100k.

Do you mean that your home value is 2x your annual pension income?

EarlyBirdly · 03-22-2019, 05:47 AM

Here's an equal or better "Method":

Procure a live Chicken, tie 3 rocks to it and proceed to throw it in the water. If it floats take the weight of the rocks in grams and divide by 73 ( The Little known RULE of 73 ).

Multiply that number by estimated number of feathers on the Chicken and determine square root thereof. This number times 10.178 will give you an estimated required annual income from all investments combined.

If the Chicken sinks and drowns...Find another "Method".

Alternately, get another Chicken and some more rocks.

This Method is 100% accurate, almost 60% of the time.

pb4uski · 03-22-2019, 08:02 AM

^^^^ given your screen name I would think that you would be kinder to chickens....they are birds too.

Offgrid Organic Farmer · 03-22-2019, 08:06 AM

Quote:

Originally Posted by pb4uski

Huh? If your home is worth $100k then your annual pension would be $500k... $500k X 0.2 = $100k.

Do you mean that your home value is 2x your annual pension income?

My home value is $90k. My pension gives me $19k/year.

[home value] X 0.2 = pension

LARS · 03-22-2019, 09:36 AM

Quote:

Originally Posted by Franklin

Oh crap! I live in LA and my house is way expensive (but paid off!). Now based on this method I gotta go back to work.....shoot me now.

Me, too! Based on this formula I would have to turn back the clock twenty four years and unretire. Which pretty much means this formula is utter nonsense as 99% have agreed.

joeea · 03-22-2019, 09:41 AM

Quote:

Originally Posted by EarlyBirdly

Here's an equal or better "Method":

Procure a live Chicken, tie 3 rocks to it and proceed to throw it in the water. If it floats take the weight of the rocks in grams and divide by 73 ( The Little known RULE of 73 ).

Multiply that number by estimated number of feathers on the Chicken and determine square root thereof. This number times 10.178 will give you an estimated required annual income from all investments combined.

If the Chicken sinks and drowns...Find another "Method".

Alternately, get another Chicken and some more rocks.

This Method is 100% accurate, almost 60% of the time.

I tried that. It says I should have retired 20 years ago.
Perhaps I shouldn't have used fried chicken?

pb4uski · 03-22-2019, 11:44 AM

Quote:

Originally Posted by Offgrid Organic Farmer

My home value is $90k. My pension gives me $19k/year.

[home value] X 0.2 = pension

Got it. If you had flipped "is" and "X0.2" it would have been clear.

cathy63 · 03-22-2019, 12:21 PM

Quote:

If you live in a $1.4 million house, you live in a pretty nice neighborhood. Those houses have pretty nice cars in front of them, and so will yours. Maybe you think you will have an old rust bucket sitting in front of your $1.4 million house. Then you will be that guy.

If you are living in a $1.4 million house, you are not buying your clothes at Old Navy. You are not getting your furniture from Bob’s Discount Furniture. You are not getting your jewelry from Kay. You are not getting your groceries from Walmart WMT, -0.44% — you are going to Whole Paycheck.

OMG! We have been an embarrassment to our entire neighborhood for 30 years! Why, oh why didn't anyone tell me that I'm not supposed to shop at Old Navy? And to think I've just been walking to Vons for groceries all these years instead of driving miles to Whole Foods! Well, at least we have always parked our low-cost-but-fully-paid-for vehicles in the garage.

Big_Hitter · 03-22-2019, 02:29 PM

Quote:

Originally Posted by joeea

[url]
1. Take the market value of your house, and multiply by 0.3. That is the income you need in retirement.

2. Take that number, and divide by 0.04. That is the value of the assets you need to retire with."

Does anyone think this makes any sense at all?

2 makes sense (25x annual spend), 1 does not, at all

1 should be "annual spend"

tmm99 · 03-22-2019, 03:53 PM

This is totally absurd IMO.

Winemaker · 03-22-2019, 06:54 PM

Spot on here.
$320,000 house, not including 3 other rental properties. x.3= 96,000

Divide by 0.04, gives $2,400,000 nut. Did not include pensions, SS, or rentals.

Life is good, God is great. It'll be 5 years in October.

pb4uski · 03-22-2019, 08:59 PM

Quote:

Originally Posted by Winemaker

Spot on here.
$320,000 house, not including 3 other rental properties. x.3= 96,000

Divide by 0.04, gives $2,400,000 nut. Did not include pensions, SS, or rentals.

Life is good, God is great. It'll be 5 years in October.

That and a broken (analog) clock is right twice a day.

youbet · 03-22-2019, 09:27 PM

Quote:

Originally Posted by garyt

At first glance it sounds ridiculous to me. What if one million dollar house is paid off and the other has 25 years to go on the mortgage? Seems those two examples would need different incomes?

A mortgage on a property does not effect its "market value."

Winemaker · 03-23-2019, 07:07 AM

Quote:

Originally Posted by pb4uski

That and a broken (analog) clock is right twice a day.

I agree the ratio is meaningless, but you don't have to be condescending. But the numbers fit my situation, and I didn't base them on the ratio 5 years ago.

ckelly78z · 03-23-2019, 07:19 AM

#1 wasn't too far off (a bit high), but #2 is difficult to measure with so many variables to consider. Just in assets, #2 is about twice what I will have, but add in a pension, and SS, and I don't know where i'm at.

ShokWaveRider · 03-23-2019, 07:20 AM

We could not spend ~$310k a year if we tried.......... The house only costs $15k a year to run all in!

pb4uski · 03-23-2019, 10:17 AM

Quote:

Originally Posted by Winemaker

I agree the ratio is meaningless, but you don't have to be condescending. But the numbers fit my situation, and I didn't base them on the ratio 5 years ago.

I was trying to be humorous, not condescending. I'm sorry that it ws received differently from intended. I should have added a

to that broken clock post.

youbet · 03-23-2019, 10:28 AM

#1 - represents only about one half of our current annual spend. It would be a very spartan existence if spending was limited to 0.3 X the current market value of our home.

#2 - is just another way of stating the so-called "4% guideline." No news here. If the current market value of our home was 2X the Zillow estimate, then that would work fine.