$1,000,000 and the clothes on your back

G

GTM

Recycles dryer sheets
Joined
Oct 2, 2004
Messages
260
Is that enough to do what you want to do forever and ever?

If so what would you do beginning tomorrow.

If not why
 
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
 
Is that enough to do what you want to do forever and ever?

If so what would you do beginning tomorrow.

If not why
Click to expand...

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.
 
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! :)
 
$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.
 
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
 
[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 ;)
 
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.
 
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
 
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
 
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.
 
I could do it. That's more than my net worth right now, so it'd be an increase. I'd give notice today!!!
 
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-
 
And since she has contributed over the years to our nest egg she gets a say in the retirement plans.  
Click to expand...
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 :)
 
I could do it. It would involve some changes, but I think it would be doable.
 
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
 
It should be up significantly. Of course 250K in 93' is worth quite a bit more than it is in 04'.
 
$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.
 
 Motivation is
everything.  The million bucks is a distant second.
John Galt
Click to expand...

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
 
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
 
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
Click to expand...
Hey Mikey: Once again you show commen sense in your posts.
The only thing that motivated me to retire early, was the idea that I could live as if I were still working, but had the time to do the things that I didn't have time to while chasing a buck.
If I had to live like John Galt appears to live, I would still be working.
I've been poor, and as you stated, it's no fun.
Your point about the poster stating "my wife contributed to ER pile, so I therefore owe her, was also quite appropriate. My wife didn't work outside of the household, but she put up with me for years, so i couldnt expect her to put up with going backwards.
Retirement is great, but some posters may be fooling themselves if they think that retirement is a magical pill that allows them to completely overhaul their previous lifestyle and allow them (and their wife, if she doesn't haul your a-- into divorce court), to live once again like starting over. (It's a damn site different than the nostalgic memories of being a kid and living on a wing and a prayer.)
One important thing also, that never seems to be considered, is at what age you are talking about retiring.
There is a world of difference between retiring with $l,000,000.00 at age 40, and the same amount at age 60.
The amount that would be required is up to the individuals, but I don't believe that a complete overhaul works for most folks.
If you have enough money to live reasonably close to the way you were living when you were working, then by all means "pull the pin" if you have a desire to do so, but an error on the upside is the best.
Regards, Jarhead
 
Jarhead and Mikey.............. You guys make me laugh, which is a good thing. Nobody needs a million to retire. Nobody!
We lack for nothing. Nothing! Man. if anyone has a better life than I do, I'd like to see it. Fishing, biking,
dining with friends, boating, travel. I leave Sunday
for a week in Texas, including some striper fishing.
Also selling some land while there, so I will return awash in cash.
Then., more fishing and more biking until the weather
gets dicey. After that, off to Florida for a bit.
I've never seen a million dollars, but does this
sound like deprivation to you?

John Galt
 
Ok a mil and nothing else, and no bragging on doing it on a shoestring when a working wife is bringing home the paycheck.

I'd buy a nice place in an inexpensive area for $100k...plenty of places that are decent to live in have average housing prices in that vicinity. That "retirement place finder" suggested a dozen or so places in the southeast, new mexico, and arizona that were in the $80-120k range for average home prices. $25k in contents for the home.

A couple of low mileage used toyotas or hondas in good condition for another $25k.

Invest the other 850k in a conservative fund like Wellesley. Take the 3.5-4% dividend (recent) $30k-34k. Given this funds track record goes forward, the principal will more than keep up with inflation while continuing to throw off at least this level of dividend.

In fact, you could probably swing this with as little as 650-700k. But you're not going to pull it off with less than a half mil unless you're living in a shotgun shack and hunting/fishing for your dinner every day. Maybe you could do it for 20 years, but you'd be eating your principal and inflation would be nibbling away at you.

Without a mortgage, car payments or other debts, this income exceeds my current budget. We live pretty good. We eat well (our last 3 dinners were smoked salmon and trout, maine lobster, and prime rib...but I did the cooking), we drive nice recent model cars, live in a newer home in a nice subdivision, and have plenty of nice stuff. My working wife is kicking in some money, but most of her income goes to paying the health care and her retirement plans. Before we got married and mixed in her income though, this plan was fungible for me on my own.

No international travel, $40 bottles of wine, $200 outfits, regular expensive dining out, or $60k cars...but those things never made me happy anyhow.

Spending all of my time with my kid will, I suspect.

Not having to eat my self respect while dealing with stupid office politics and ridiculous boneheaded management maneuvers definitely does.

Sleeping until 1:18 in the afternoon like I did today? Priceless.

I suppose the other option at this funding level if you love travel and fine dining is to do a Terhorst and own nothing, living transiently in low cost countries and dining out every meal... Invest via the same methods and live pretty well on the 35k-40k a year.
 
You'd need to find the right state for healthcare. I could get 100% coverage (except for small $10-20 copays) for both of us and our kid for under $500 a month. I was paying $170 for single coverage before she put me on her plan.

Its do-able. You probably couldnt sit in place in an expensive area though.
 
Retirement is great, but some posters may be fooling themselves if they think that retirement is a magical pill that allows them to completely overhaul their previous lifestyle and allow them (and their wife, if she doesn't haul your a-- into divorce court), to live once again like starting over.  (It's a damn site different than the nostalgic memories of being a kid and living on a wing and a prayer.)
Click to expand...
On the money Jarhead! When people ask what ER is like, I tell them it's great, and it is. But my life is almost exactly like it was before - minus the job - and plus an extra 40 hours/week to do what I want to do. But in many ways it's the same. All the same infrastructure is still in place and must be paid for. It's not magic, and it doesn't change most things.
 
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