v8dave
Wizard
I used to wonder about how much it would take in assets to be financially stable enough to "retire." To get to where working was for entertainment value and if I didn't like it--quit with no bad effects on my life style.
After confusing myself over a bunch of either unobtainable or too easily reached goals. I finally dawned on me how to figure out how much money it took and still allowed for inflation and costs of living in different places.
The key is to have the equivalent money to the value of four houses you could own outright (i.e., no loans)--in the place you want to retire at. One house to live in and the other three houses for their income.
This means that where living is inexpensive, you need less money because houses are cheaper too. But if you want to live in New York city, well too bad, it costs a lot more to retire there.
This doesn't mean you have to have four houses, just one you own outright to live in. The equivalent money [at the time you retire] of the other three houses needs to be in some investment that WILL GROW in value over time besides paying out income. So, for houses, they'll increase in value over time and the rents will increase over time too. For investments, you need to allow some of the dividends/interest to remain in the investment package to continue compounding so you can have constant value income over time. Don't count on Social Security, it'll go to pay for medical insurance and pills.
Now,if you retire from a company and actually get retirement pay, this can offset part of one of the value of the houses. That is, if the retirement pay is half of one house's rent equivalent, then you need a half of a house less in holdings.
Nobody said it would be easy, but it is attainable. Don't think for a minute that you'll be able to live on less money after you retire. Just like Okee Don said if you have more time to spend more money, you need more money. Well, maybe that's not exactly what he said. But, he said something close to that.
After confusing myself over a bunch of either unobtainable or too easily reached goals. I finally dawned on me how to figure out how much money it took and still allowed for inflation and costs of living in different places.
The key is to have the equivalent money to the value of four houses you could own outright (i.e., no loans)--in the place you want to retire at. One house to live in and the other three houses for their income.
This means that where living is inexpensive, you need less money because houses are cheaper too. But if you want to live in New York city, well too bad, it costs a lot more to retire there.
This doesn't mean you have to have four houses, just one you own outright to live in. The equivalent money [at the time you retire] of the other three houses needs to be in some investment that WILL GROW in value over time besides paying out income. So, for houses, they'll increase in value over time and the rents will increase over time too. For investments, you need to allow some of the dividends/interest to remain in the investment package to continue compounding so you can have constant value income over time. Don't count on Social Security, it'll go to pay for medical insurance and pills.
Now,if you retire from a company and actually get retirement pay, this can offset part of one of the value of the houses. That is, if the retirement pay is half of one house's rent equivalent, then you need a half of a house less in holdings.
Nobody said it would be easy, but it is attainable. Don't think for a minute that you'll be able to live on less money after you retire. Just like Okee Don said if you have more time to spend more money, you need more money. Well, maybe that's not exactly what he said. But, he said something close to that.
