First million is enough

[Al18]

In my opinion, you should always use investable assets and not Networth in your calculation in determining your yearly spend during retirement. The exception is if you plan to sell your house to travel full time.

 

[Andre1969]

OMG, It would make life so much simpler on this forum if we could agree to let NW be NW and use another term like "invested assets" to refer to umm... invested assets.

I try to differentiate the two, but will admit, I probably do say NW every once in awhile, when I'm not thinking. It's just easier to type "NW" than "Invested Assets." And if I type "IA" most people aren't going to know what that means, I'm guessing.

I'm too lazy to try looking at posts from the past, but I think for "NW," I would usually say something like "NW, including home equity." I know that's redundant, but at least it lays out what I'm talking about, since "NW" probably does get played fast and loose around here from time to time.

 

[mathjak107]

net worth can contain anything of value…

it’s hard to compare net worth figures because everyone counts different things. .

i never have a reason to even look at net worth since many of the things we have we would never sell nor would i count .

i am more interested in invested assets that we base our income on .

if i wanted to i can add more then3 million to my number by converting our income streams in to what it would take in assets to generate that pension and ss check.

people add lump sum values all the time of future income .

but if you do that you really need to account for future expenses and liabilities too so its a rabbit hole

 

[Major Tom]

40k on a million plus ss would be a very stressful life here in nyc sweating every unexpected bill

It would probably be a little tight here in the SF Bay area too if I was paying market rate rent. Two things have worked in my favor and allowed me to live comfortably in the SF East Bay on $27,600 a year -

1) Cheap rent. I got lucky in finding this place, and pay about half of what I would pay on the open market. It wouldn't be considered cheap in Arkansas, but it sure is here. My best friend lives in a nicer neighborhood than me, and pays significantly less than I do. People's jaws drop when she tells them how little she is paying. She really got lucky, though her place is very small.

2) A willingness to be content with a less than middle-class lifestyle, materially speaking. I live in a 285 sq ft studio in a lovely old house and rely on a bicycle and public transportation to get around.

Regardless of rent stabilization/rent control regulations, there are sometimes some lucky folk who happen upon very affordable living situations. I think I must be one of them. I may not have much, but I never worry about bills. I cannot pay them fast enough when they arrive! That, and the sheer freedom of having almost limitless time stretching out in front of me every morning when I wake up are worth far more to me than any amount of material riches.

 

[mathjak107]

i always say , money may not buy happiness, but many times it buys choices .

there are many times in life where it can be so important to have choices.

like my dad had no choice but to leave ny to afford to live .

he was a thousand miles a way . my kids barely knew him

 

[CaliKid]

It essentially doesn't matter how big the pile is if your cost of living is too high. By far, the most important thing is watching your lifestyle creep as life goes on. If you can live modestly you can have a pretty modest pile and feel GREAT about your retirement lifestyle. If you have big "needs" then you can have tens of millions and feel like it's not enough. This is not a one size fits all discussion. I personally envy the people who live more modestly than we do. To each their own!

 

[TheWizard]

OMG, It would make life so much simpler on this forum if we could agree to let NW be NW and use another term like "invested assets" to refer to umm... invested assets.

We can.
Read TheWizard's post #43...

 

[LateToFIRE]

net worth can contain anything of value…

it’s hard to compare net worth figures because everyone counts different things. .

i never have a reason to even look at net worth since many of the things we have we would never sell nor would i count .

i am more interested in invested assets that we base our income on .

if i wanted to i can add more then3 million to my number by converting our income streams in to what it would take in assets to generate that pension and ss check.

people add lump sum values all the time of future income .

but if you do that you really need to account for future expenses and liabilities too so its a rabbit hole

The widely used definition of NW (outside this forum) is pretty simple: Assets minus Liabilities.

I understand all the reasons to make adjustments and modifications for retirement planning purposes. Personally, I largely ignore home equity for planning purposes - not that it isn't meaningful. But, I use it as my cushion factor - if all else fails we could extract that equity towards the end of the planning period.

But, for the sake of clarity, if modifying/embellishing the definition of NW, people should simply just say state that in their posts, or use a different nomenclature. Would avoid much confusion/debate.

 

[mathjak107]

i never get involved in net worth discussions because there are are no ground rules ever on what should get figured .

technically anything you can sell like old fishing poles has a value .so i stay out of those types of show me yours and i will show you mine kind of surveys

 

[LateToFIRE]

i never get involved in net worth discussions because there are are no ground rules ever on what should get figured .

technically anything you can sell like old fishing poles has a value .so i stay out of those types of show me yours and i will show you mine kind of surveys

Probably a good idea to stay out of those polls. But, as far as your NW technicality goes, that is a "so what". If you included the value of your $30 fishing pole, that's immaterial, and most people are not going to get that granular as to counting their fishing poles.

But, if there is a market for it as a collectible and it has significant value, then it's a worthy asset. For example, if it was George Washington's childhood fishing pole and could fetch $1M in a Sotheby's collectibles auction, more power to yah. It's a meaningful asset. Sotheby's would probably even loan you money against it (trust me, I've seen whackier things used as collateral).

 

[TheWizard]

i never get involved in net worth discussions because there are are no ground rules ever on what should get figured .

technically anything you can sell like old fishing poles has a value .so i stay out of those types of show me yours and i will show you mine kind of surveys

If you've been involved in closing out your second parent to die's house, giving away some stuff, hauling lots of stuff to the dump, and auctioning off the remainder, to finalize the estate, you'll have a good idea what Net Worth really means...

 

[LateToFIRE]

It essentially doesn't matter how big the pile is if your cost of living is too high. By far, the most important thing is watching your lifestyle creep as life goes on. If you can live modestly you can have a pretty modest pile and feel GREAT about your retirement lifestyle. If you have big "needs" then you can have tens of millions and feel like it's not enough. This is not a one size fits all discussion. I personally envy the people who live more modestly than we do. To each their own!

Similar sentiment. Substantial life simplification is one of my biggest retirement goals.

 

[LateToFIRE]

If you've been involved in closing out your second parent to die's house, giving away some stuff, hauling lots of stuff to the dump, and auctioning off the remainder, to finalize the estate, you'll have a good idea what Net Worth really means...

Been there, done that. I know what NW means.

 

[brett]

My focus prior to early retirement was on cash flow. Required and desired components. Adjusted for tax and inflation.

 

[Major Tom]

i always say , money may not buy happiness, but many times it buys choices .

Very true. Sorry to hear about the choice your Dad had to make, and the effect it had on his relationship with his grandkids.

 

[Andre1969]

If you've been involved in closing out your second parent to die's house, giving away some stuff, hauling lots of stuff to the dump, and auctioning off the remainder, to finalize the estate, you'll have a good idea what Net Worth really means...

Yep, it means a LOT of work!! Doing it now, slowly clearing out my deceased Grandmom's house. Mom was supposed to handle it, but then she died. Then it technically should have fallen on my uncle, but he was pretty sick by then, and died a couple months after Mom. So, it's all in my hands now!

And to make things worse, Grandmom and Granddad bought that house back in 1950, and thanks to vivid memories of the Great Depression, had a bit of a hoarding mentality. Back in the early 80's, instead of just getting rid of stuff, Granddad ended up building an addition on the side of the garage, roughly 12x25 feet. And it got pretty well-packed.

 

[AZsniper]

OP-
How old were you when you retired with 1M?

Just curious. I think it could matter depending on age.

Thanks! Good thread and perspectives.

 

[aja8888]

Different view:

Going on 81 years old, great health.
Widower, living alone with a small dog.
MCOL area.
No debt
No grandchildren (one daughter, married).

Cash flow = $93,000/yr (SS, RMD, Interest on portfolio)

All in spending including taxes, medical insurance, living expenses = ~$40,000/yr.

Net worth (available funds and a small paid for house) is just under $1.7 MM.

I'll never need it.

I did not plan for my life to be ending this way (minimal family), but it just happened.

 

[Car-Guy]

^^^^^
Does that NW calculation include your house or not?

 

[aja8888]

^^^^^
Does that NW calculation include your house or not?

Only one of them (the smaller one). They are both paid off.

 

[brett]

Net worth discussions are as meaningless to me as many of others about housing costs, food costs, travel spend, retirement spend,etc.

They are, for the most part, 'how long is a piece of string' discussions.

All relative you your lifestyle, COL, preferences, etc.

 

[Bigdawg]

I look forward to hearing more from those that are not multi-millionaire (NW with house or otherwise) and living a great, happy retirement!!

Flieger

I've been FI since 2010 and RE for 14 months now. 57 was a good age to retire for me. DW is 52 and would like to work 21 more months to get her into her yr 55 for grabbing 401k if she wants to. We have only around 700k investable. Here's the thing, we don't need any of it. 2 military pensions along with VA disability more than covers our expenses. DW will get an additional COLA pension at 62 (FERS) and of course we have SS waiting anywhere from 62 to 70. If our 700k was somehow wiped out tomorrow, we would be fine. On 1 May over 11K will be deposited into our accounts. Over 4k of that is tax free. My DFIL (retired Navy Master Chief) told me during our first enlistment, "you won't get rich in the military, but you'll never go hungry, and your bills will get paid". He was right.

With all that being said, my hat is off to all of those who have worked hard to get their millions. Good for you.

 

[aja8888]

Net worth discussions are as meaningless to me as many of others about housing costs, food costs, travel spend, retirement spend,etc.

They are, for the most part, 'how long is a piece of string' discussions.

Just like tracking all your spending down to the penny each year after you are retired. Those are sunk costs and not meaningful unless you have a spending "problem".

 

[thod]

I apologize for hijacking the thread by introducing the house/no house used in NW calculation.

 

[Dtail]

Just like tracking all your spending down to the penny each year after you are retired. Those are sunk costs and not meaningful unless you have a spending "problem".

And yet W2R and myself (just 2 examples) still track it with no spending problems.
Just playing AJA - I do like your posts.