What was your "safe" number?

[FIREd]

I have to say that "safe" or "goal" numbers keep moving.

That is definitely true for us as well.

 

[seraphim]

I never had a particular goal, just kept putting away what I could when I could and forgot about it. Ended up with far more than I ever reasonably expected. I'm content...


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[NW-Bound]

I think that if I kept on working and acquired more stuff, my "safe" number might keep moving up. When earned income stopped, a different perspective became clearer.

 

[ERhoosier]

You are doing well for your age. My feeling of safety came more from being debt and mortgage free. Very empowering to not be owing to any creditors.

Amen to that!

FWIW- When I 1st graduated from college the (inflation-adjusted) "safe" number I saved hard to reach was MUCH smaller than what folks target today. Of course, back then you could lock in a 10-12% yield from 10yr Treasury bonds

 

[daylatedollarshort]

That was when we felt more secure as well. I have to say that "safe" or "goal" numbers keep moving.

I try to resist having my number move ever upward. I read an article awhile back about venture capitalists who were billionaires and "fear driven". The only one in the office that had cut his hours had a serious illness.

This is also covered in the book, What Happy People Know. Here is a link from an interview with the author:

"....It's a brilliant insight, because money doesn't make you happy.

MTM: And why doesn't it?

BAKER: Because of what psychologists call accommodation. In my first job out of college, I made $6,500 a year and I thought that was great; in college I had been working in the student union for about $1.55 an hour. Today, when I think of making $6,500 a year, it's not anywhere near the income I would typically think about generating. Of course, there has been inflation, but even so, the fact is that I've gotten used to a certain level. I've accommodated.

A Gallup survey asked people who made $10,000 a year, "Who is wealthy and happy?" Their response was, "That's simple-people making $50,000 a year." So Gallup went to folks making $50,000 and asked the same question. Their response was, "People making $100,000." For people making $200,000, the sense of who is wealthy and happy was a couple of million dollars. We tend to push the bar above and beyond where we are, no matter where we are, because of accommodation."

Article: What-Happy-People-Know

 

[Lucantes]

In hindsight, I guess I didn't ask the question in a way everyone understood. For those that "got it", congrats on your reading comprehension skills.
this number was a number in which you are "over the hump", and you know that even if life turns sideways on you, you'll have a little something, you will not starve. You might live in a tent hunting and fishing till the day you die, but you will always have a nice tent, a nice pole, and ammunition. You have your basic needs met for life, not your "lifestyle choices".

I have no desire to just get myself to where I will not starve, that has never been a LBYM/FIRE goal of mine, and as such I never designed my lifestyle around that goal.
My goal has always been to get myself to the point where I can retire at 50 and meet my "lifestyle choices", not just be a hermit or survivalist in the woods.
I guess I was doing it wrong.........

 

[Lucantes]

I never had a "things will be safe" asset number in our planning, so I somewhat ignored the OP's premise and stated our total liquid assets necessary to live the way we want forever. That seems pretty safe to me.

+1

 

[cooch96]

$500k investable assets without debt or mortgage. I could work part time at wal-mart for luxuries (this actually just sounds lovely to me right now). I'm currently at $300k with four years left on the mortgage.

DW actually seems to like her job, but she spends much of her salary taking care of her shiftless parents and buying battery organizers, so I don't count on her for contributing to our future. She's a "live in the now" gal. Plus she considers money as either a necessary evil, or simply evil, depending on her mood.

 

[tulak]

I also know one could live quite well with great medical care, safety and quality of life somewhere in small town Czech Republic with 1 million total NW and SS waiting when you get to 62.

That's my plan B, so I guess that would be our safe number. You could even do it for that amount in a bigger city. But we want the option to travel and live in more expensive places, so for now we'll keep working. Plus, I think our kids would rebel.

 

[Rick_Head]

There is no "safe number". There is enough and not enough. I ER'd in 07 with < $3M. B4 the last "correction", we had about 4M. We no longer have that much. It makes me uneasy to have less than I did, last week, even if (in all likelihood) DW and I will never spend it.

I sure hope we have enough. YMMV

 

[kaudrey]

Like others here, I guess I just don't think that way. I am 45 and have about $1M in investable assets. However, if DH and I lost our jobs and didn't find other ones, we couldn't keep living like we are. Could we sell our real estate, move somewhere else, stop eating out and traveling, stop playing golf and sell the motorcycle, and then live on the $1M for 40 years? Sure. So I guess we are safe. But to me, being safe has always been about being able to FIRE in the way that I want.

I don't think it's that people misunderstood, I think more of us focused on FIRE just didn't have that interim goal on our minds.

 

[Totoro]

I'll have a bit lower numbers for a change

First little hump was when I passed over 250k EUR NW at 30 years old or so. Then I promised myself to start optimizing for fun vs. income.

Next hump was 500k EUR, around 33 years old (last year). At that point I felt like "coasting": I'd have to watch my expenses pretty closely and work every now and then, certainly if I want to travel for fun. Maybe part-time or at low level job, but I'll be fine most likely. No excuses to delay if I want a career switch or go save the whales. Semi-FIRE or taking six months off is an option. Full FIRE feels rather scary. Portfolio fluctuations start to overpower my savings capacity.

Next hump will be at 720k (currently at 600k or so), which is when I pass 3% at "normal budget" or 4% at "money I don't even spend today". 720k used to be about 1M in USD, but the eur dropped quite a bit with the recent correction.

Anything above 720k I consider "gravy" and available for either luxury spending or investing. But I'm not there yet so the goal posts may move

Fear of not "having enough" will be with me I think for the rest of my life, and it's not strong enough to motivate me to keep going to 2M or anything like that.

 

[Totoro]

"....It's a brilliant insight, because money doesn't make you happy.http://www.morethanmoney.org/articles.php?article=What-Happy-People-Know_436

The buddhists got it right: happiness is a state of mind that can be trained.

Very nice intro talk (no esoteric jumbo), 20 mins:
http://www.ted.com/talks/matthieu_ricard_on_the_habits_of_happiness

Talks about how happiness is mostly an inner process regardless of outer conditions. Which is good news, because we can all be happy!

Not so good news is that it likely takes considerable training and lifelong maintenance. Like weight loss programs

On the other hand, how many things are more important than being happy?

 

[Beldar]

No "Safe" number for us, but rather a goal realized (belately in my case).

I recently uncovered a workbook I put together in the early 90s which listed some lifetime goals or dreams, i.e. $1m in investments, paid off mortage, etc. I then realized those goals came true (and were in some cases exceeded) even though I never really paid continual attention. Sort of snuck up on us. I was in a funk for the rest of that day.

Now more than ever I realize the final version of Life 1.0 is rapidly coming to a close, and the RE portion of FIRE has taken on more importance.

 

[NW-Bound]

Yes, when you feel that your time is running out, that "safe number" no longer has to include budget for a new car every 3 years, nor a European annual vacation. Of course, some people make plan for a long life, and are willing to work longer to accommodate all their needs. There's no universal solution. YMMV.

 

[Willers]

...But to me, being safe has always been about being able to FIRE in the way that I want.

I don't think it's that people misunderstood, I think more of us focused on FIRE just didn't have that interim goal on our minds.

+1 We just passed what I'd call a safe number, but that means a reasonable certainty that we can live the way we want right now rather than at some point in the future.

I did keep (for fun in looking back) a sheet I made 20 years ago that calculated what my net worth should be each year through retirement, but most of the assumptions turned out to be wrong. Life is like that.
1) Work until 65.
2) Straight line annual returns of 10%.
3) WR of 8%.

I decided to just keep saving what I didn't need and figure it out later. It worked out pretty well.

 

[Travelwanted]

FWIW - I like what I learned from some on this site: ?x annual spending. That ? varies by the author, much like WR. For me, I like 35x spending rate in investable assets (not NW).

I think FIRE by definition takes planning, LBYM and faith that your plan will work.
I think the "faith" part is why so many come here for affirmation that their plan will work.
For many of us, there is no going back once we FIRE. But, we really won't know if the plan really worked out for 10, 20, 30, even 40+ years.

 

[Ronstar]

We never had a "safe" number. We're now retired, but I never once felt that we had a "safe" number of assets to go into retirement with.

 

[NW-Bound]

As the OP elaborated, and I agree with him, it all depends on what the meaning of the word "safe" is.

 

[rodi]

FWIW - I like what I learned from some on this site: ?x annual spending. That ? varies by the author, much like WR. For me, I like 35x spending rate in investable assets (not NW).

Not much like WR - but EXACTLY like WR.

?x annual spending is the inverse of WR - they are directly correlated.

4% WR = 25 x spending.
3.5% WR = 28 x spending
3% WR = 33 1/3 x spending.
2.9% WR = 35 x spending

 

[eta2020]

Yes, when you feel that your time is running out, that "safe number" no longer has to include budget for a new car every 3 years, nor a European annual vacation. Of course, some people make plan for a long life, and are willing to work longer to accommodate all their needs. There's no universal solution. YMMV.

I agree. If I did not have my "safe" number at 55 I would adjust and FIRE anyways.

Having said that I am meticulous planner and I had my minimum safe number computed 15 years ago. It is unchanged today and remains at exactly same value of 3 million in invest-able assets.

I think many people who FIRE are big planners and know exactly where they go. It is one of the traits of FIRE types IMO.

 

[CentralTexas]

First Post

This topic has been top of mind for me lately. I have been focused on financial independence every since I can remember, I'm 38. I actually work in the financial services industry as it is my passion. I talk with people all day about their finances. I've never talked about my personal financial situation with anyone other than my spouse so this post is somewhat therapeutic.

Logically, I feel like I have hit my safe number, but my assets are in liquid and non liquid assets. The total is about $5-6M, $2M of which is in marketable securities. I own a paid off commercial property yielding about $60k per year on a NNN lease (tenant pays all expenses other than major repairs.). Tenant is my business so the rent is probably above market. I would have to sell all or part of a business stake worth $1.5-$2M after-tax. I owe a little less than $400k on my house which I would love to payoff, but at 3.25% I struggle to do it. I don't consider the equity in my house an asset, gotta live somewhere.

I could easily replicate comfortable living expenses from my investments. I consider myself frugal, but CREEP is alive and real so I am probably not as frugal as I once was. The main issue is the opportunity cost of early retirement, giving up healthy income potential for no more earned income. I can save a lot of money each year. I think they may call this greed.

I have two kids with one on the way. Two colleges are paid up, but I would still need to fund the 3rd.

Logically knowing you hit your "safe" number and pulling the trigger are two very different things.

 

[AnIntentionalRoad]

As I mentioned, as people get older and accumulate more and advance their lifestyle, they are accustomed to more luxuries that are now taken for granted. Yes, the hedonic threadmill is real. And people often forget what the basic necessities are. It is a lot less than what they are consuming now.

I have often half-jokingly talked about living in an RV, boondocking in the state of New Mexico and living like many RV bloggers I have read. It does sound like fun living, and healthy too, no matter what one's net worth is. Surely, you can do that with $500K, and that's a lot more than what some of these people have. I have yet to try that for a few months, to really experience it (sans DW as she would not join me ). And the comfort is way better than what a tent provides.

I think the stash for basic survival probably goes down to near zero for countries with a more generous welfare policy. They probably cringe at the thought of saving up $500K just for basic survival.

Sure, it's roomier than my motorhome, but where's the running water? Where's the toilet?

This is very similar to the cruising community. Many couples (even families) living on sailboats long-term with way less than 500k in investments.

 

[BreathFree]

I believe my safe number is $900,000. A 3% withdraw rate will pay my basic living expenses (food, housing, electricity, insurance and property taxes). However, I would not feel comfortable leaving my job permanently without other sources of income. I would feel comfortable enough to leave temporarily or maybe quit my career and move to something less stressful with less pay.

 

[AnIntentionalRoad]

This topic has been top of mind for me lately. I have been focused on financial independence every since I can remember, I'm 38. I actually work in the financial services industry as it is my passion. I talk with people all day about their finances. I've never talked about my personal financial situation with anyone other than my spouse so this post is somewhat therapeutic.

Logically, I feel like I have hit my safe number, but my assets are in liquid and non liquid assets. The total is about $5-6M, $2M of which is in marketable securities. I own a paid off commercial property yielding about $60k per year on a NNN lease (tenant pays all expenses other than major repairs.). Tenant is my business so the rent is probably above market. I would have to sell all or part of a business stake worth $1.5-$2M after-tax. I owe a little less than $400k on my house which I would love to payoff, but at 3.25% I struggle to do it. I don't consider the equity in my house an asset, gotta live somewhere.

I could easily replicate comfortable living expenses from my investments. I consider myself frugal, but CREEP is alive and real so I am probably not as frugal as I once was. The main issue is the opportunity cost of early retirement, giving up healthy income potential for no more earned income. I can save a lot of money each year. I think they may call this greed.

I have two kids with one on the way. Two colleges are paid up, but I would still need to fund the 3rd.

Logically knowing you hit your "safe" number and pulling the trigger are two very different things.

Welcome to the forum! At 38, even if you are FI, no need to pull the plug on your career if you love what you are doing. But if there is a second career or other serious activity you dream of doing, now would be a great time, esp. at your NW level.

That is what I chose to do at 43.