Suze Orman - You need 20M to retire early

[Out of Steam]

I have a question for anyone that hears it...Why does anyone listen to her?

I'd trust a random group of 10 folks on this forum way more for financial advice than her.

On this forum, yes. Most could come up with solid advice.

 

[Katoslake]

Maybe she’s assuming our government will continue printing money and primming inflation ? If so, in 2030 , 20 mil may be todays 5

 

[Koolau]

Maybe she’s assuming our government will continue printing money and primming inflation ? If so, in 2030 , 20 mil may be todays 5

Yeah, $5.00

 

[LateToFIRE]

In other news today, Yahoo Finance headline (which I'm not going to support by providing a link) says "Dave Ramsey Guarantees If You Have A Car Payment, 'You Will Be Broke Your Whole Life' And Says The Average Millionaire Drives A 4-Year-Old Car With 41,000 Miles — Investing The Payment Could Make You $5 Million Instead". No need to read the article - like most of their news, the headline is basically the gist of it. Clickbait.

Come to think of it though, I've never had a car payment, always paid cash. Hmmm.

 

[Time2]

And Says The Average Millionaire Drives A 4-Year-Old Car With 41,000 Miles

Ya, but I draw that number down with vehicles that are, 27, 17 and 15 years old.

Come to think of it though, I've never had a car payment, always paid cash. Hmmm.

Same with us!
We have had a 1997 Toyota T-100 since the year 2000, it has 130k miles and still going strong.

 

[Andre1969]

Ya, but I draw that number down with vehicles that are, 27, 17 and 15 years old.

We have had a 1997 Toyota T-100 since the year 2000, it has 130k miles and still going strong.

Now that I think about it, my '57 DeSoto has hit FRA and is now entitled to its full SS benefit, age 67! Hmm, that got me thinking...my ex-wife once told me that she declared "Erin" as a dependent on her taxes one year. "Erin" is what she named her '88 Oldsmobile Calais. As far as I know, she got away with it, too! Maybe I should call my DeSoto "Hernando," and see what I can get away with.

Also, if you dissect the numbers, I don't think they fully support Ramsey's argument. The average age of vehicles on the road is around 12 years, from what I've been able to find online. However, when they say "average" I don't know if they actually mean "mean" or "median." The word "average" tends to get thrown around enough that it can mean both these days.

Anyway, for the median, or mean, vehicle of a millionaire to be 4 years old, still implies that they're buying them either brand-new or just 1-2 years old, and that they're buying them pretty often. The main difference though, is that the rich can afford it, whereas the masses, not necessarily so much.

I'd imagine that a lot of the really rich lease their vehicles, and find a way to write it off as a business expense. And leases might not even be included in with "purchases."

 

[DrRoy]

I don't think I'd even know what to do with $20M.

If you get it, I can help you with that for a modest fee.

 

[Jerry1]

I can't remember the last time I drove a car past 4 years. DW holds on a little longer because she drives very little. And, I can't remember the last time I bought a used car. Most of my working years, I had a car payment (lease), yet here I am retired at 57. How did that happen Dave? Seriously, it's all about choices and disciplined savings. Cars have always been my guilty pleasure. So be it.

 

[FLSUnFIRE]

I don't think I'd even know what to do with $20M.

Yeah that's a lot but humans can get used to nearly anything. My fantasy if I won a huge Powerball (I sometimes play when it approaches a billion) would be to put ~$10M in an irrevocable trust for my health and well being and live off the allowance it paid..and I'd probably "save" a lot of my allowance just knowing me. That would allow a pretty nice increase if my lifestyle if I wanted. The rest would be charitable activities.

 

[Gumby]

I have never driven a car less than 100k miles before getting a new one, and I have usually driven them much longer. My record is 303k miles on a single car. I didn't need Dave Ramsey's advice 40 years ago and I still don't need it.

 

[pb4uski]

Suze has been irrelevant to me for a long time now.

 

[Andre1969]

Part of Dave Ramsey's math on how you "could" get to $5M is basing that on taking $500/mo that would otherwise be a car payment, and putting it in a Roth IRA, from age 30 to 70, or something like that. Considering the principal would only be $240,000, I'm guessing he's counting on some optimistic rate of return, like a consistent 11-12%.

I really wish these so called financial advisors would get it out of their minds that $500/mo isn't a lot for a car payment these days. For comparison, I had a 2000 Intrepid. $22,389 out the door. I put $2K down, financed the rest at 0.9% for 60 months. Monthly payment was $347.66. And that car was nothing fancy. Sure, it was a major step up from your typical small or mid-sized car, although I'd imagine something like an Accord or Camry was close in base price, and could be optioned up even more.

But still, it was a Dodge! And by that time, about the cheapest wanna-be full-sized car left on the market (even if Chevy was trying to push the Impala as "full-sized" and by EPA standards, the Taurus/Sable barely made the threshold to full-sized status)

Anyway, adjusting for inflation, that $347.66 would be around $640 today. So $500 won't get you much. Plus, consider how high interest rates are these days, and it will get you even less.

 

[Andre1969]

Yeah that's a lot but humans can get used to nearly anything. My fantasy if I won a huge Powerball (I sometimes play when it approaches a billion) would be to put ~$10M in an irrevocable trust for my health and well being and live off the allowance it paid..and I'd probably "save" a lot of my allowance just knowing me. That would allow a pretty nice increase if my lifestyle if I wanted. The rest would be charitable activities.

Yeah, I could see me ramping up my lifestyle a bit, but right now don't think I could spend $100K annually on a consistent basis. $20M would let me do $600-800K annually (3-4% SWR).

The only things I can think of that I really aspire to right now are a modest pool house, getting the pool re-plastered, and a '61-62 Cadillac. But all of that would be chump change, against $600-800K per year.

The one thing that would change, if $20M suddenly fell into my lap, is that I'd end this One More Year foolishness, and retire immediately!

 

[Healthy Lifestyle]

Does any of this really matter?

 

[Onda]

Depends on what one defines as early. She mey be refering to 30 year old couple. That couple will get pretty much nothing in Social Security. Has to pay for healthcare almost all their life.

You need at least some 8 digit number for that.

 

[LateToFIRE]

Does any of this really matter?

Well, um, actually, no. We're just havin some fun.

 

[Out of Steam]

I have never driven a car less than 100k miles before getting a new one, and I have usually driven them much longer. My record is 303k miles on a single car. I didn't need Dave Ramsey's advice 40 years ago and I still don't need it.

Agree. Like you, I've never driven a car less than 100K miles before replacing it. I've financed the cars I have bought and will do it on the car I'm planning to buy shortly. Driving a modest car new enough to not require more than routine maintenance is not financially reckless.

Being that I drive long distances, and have for decades, I'm not about to follow the internet pundits who think we should all buy 20 year old junk cars, have them towed home, and try to fix them up in the driveway ourselves.

 

[Jerry1]

DW keeps meticulous records of purchases. Per her records, we have had 30 vehicles in the 42 years we've been married. I only remember one of them going over 100K miles and that was very early in our marriage and at a time when I was commuting one hour each way to work.

 

[Out of Steam]

DW keeps meticulous records of purchases. Per her records, we have had 30 vehicles in the 42 years we've been married.

We've had only nine in 29 years, eight for my wife and I, one older car bought for our daughter.

 

[TheWizard]

In other news today, Yahoo Finance headline (which I'm not going to support by providing a link) says "Dave Ramsey Guarantees If You Have A Car Payment, 'You Will Be Broke Your Whole Life' And Says The Average Millionaire Drives A 4-Year-Old Car With 41,000 Miles — Investing The Payment Could Make You $5 Million Instead". No need to read the article - like most of their news, the headline is basically the gist of it. Clickbait.

Come to think of it though, I've never had a car payment, always paid cash. Hmmm.

I had car payments for two years or so back when I was younger.
Nowadays, no.
And my two vehicles are 2016 MY and 2024 MY, so I'm a good fit for the four-year old car millionaire...

 

[RetiredHappy]

We have 9 cars over 16 years between the 2 of us, going to a single car since 2019.

 

[thod]

Over 32 years (after college) we have had:
9 cars/trucks
(1 was given to me, 2 were bought new, 6 were bought used)

4 we still own
2 were sold
1 were traded in
1 was given to a relative
1 was totaled

The 4 we still own are from model years: 2016, 2012, 2009, and 1965

 

[anothercog]

In our 21 years of marriage we have had 4 cars. 3 we are still driving. The fourth was driven until is was no longer road worthy and traded in for $500 credit.

The 19 year old car has just over 150k miles which my daughter is driving and was purchased before she was born. We don't drive too much.

 

[LateToFIRE]

^^^

DW and I have only had 4 cars in our 35 years together, ranging from very used to slightly used. I'm currently driving the 14 year old beater with +150K on it. We have a newer version bought slightly used for DW and road trips. All cash purchases. Admittedly having been MegaCity dwellers most of our adult lives, cars were not a necessity until be bought a weekend home few years ago (to which we are now RE-ing).

 

[ncbill]

Would have had only 3 vehicles in over 30 years of marriage had I not received several others essentially free from older relatives who either stopped driving...or stopped altogether.

Currently driving an ancient mid-sized sedan popular with older folks whose color is what I like to call "old people gold."

I have never financed a vehicle.

I grew up thinking that was normal but was convinced it was an unnecessary by a friend back in college decades ago.