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  #31  
Old 03-11-2014, 12:55 PM
nonlnear nonlnear is offline
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Would these things to create income? If so, why would you need the 10M?
Some might, some definitely wouldn't. One is starting to right now, and looking very promising - hence the thread.

It's not that there is a particular need for $10M, but really one of life values. I could live comfortably off of the passive income from much less than $10M. However, one's economic contribution is measured in dollars, and I was looking for various perspectives on why people "build", and whether the feeling one had built enough (not strictly wealth, but accomplishments) to stop building and kick back had much to do with age. There are things I would like to create, and changes that I would like to see happen. If I do end up transitioning into a "wealthy" lifestyle (where my life's expenses are secured by passive income and all economic activity is truly discretionary) I'd like to consider opinions of people other than myself on why they would do the things they do.

As far as I've figured, the big sticking point is whether one wants to be politically active. If you want to fight for any kind of political change, then you'd best commit to endlessly piling up cash. If not, then there's much less need for millions upon millions of dollars. After all, I'd be fine with a pretty modest beach house and ski cabin. I don't need a big yacht and private island.
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  #32  
Old 03-11-2014, 01:06 PM
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Based on my current expenses I could retire pretty well right now on something like $2M. Doesn't leave much room for vacations or fun though unless I moved to the Po.

Also assumes no children or marriage.
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  #33  
Old 03-11-2014, 01:27 PM
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Originally Posted by Liz Lemon View Post
I think it depends on how you define "retirement". If you want to travel from one tropical island to the other, you will need more assets.

I've been thinking a lot about early retirement, I'd like to do it but in more of the MMM fashion. The theory is once your invested assets can produce enough passive income to cover your living expenses you are good to go. The variable that you have the most control over is living expenses. If you need $80,000 per year you might need close to $3M in assets. If you only need $20,000 per year that number is closer to $700,000.

We are currently working on aggressively paying off our mortgage. Once that's done, our annual living expenses are below $24,000. I'd rather have free time to pursue other interests, spend time with family and volunteer, rather than having to report to work 5 days a week. I can guarantee that I won't be bored. Right now, after working all week, I'm too exhausted to want to do anything else.
I'm with you there.

Decreasing the needed cash flow for expenses helps a lot in reducing tax payments. If I understand it correctly, if all of your income is from qualified dividends and long-term capital gains and it's below $73k ($36k if single), then you end up paying a 0% federal tax rate.

So basically the idea is to provide more goods and services to yourself that aren't taxable like your own labour (growing your own vegetables/fruit, cooking, home improvement) and imputed rent (through owning your own home), right?

As for me, if I were to retire early, I'd just go learn things all day, every day, as opposed to what I do now, which is just learn things when I'm not at work. Oh, and spend time with the kids that I'll have.
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  #34  
Old 03-11-2014, 01:52 PM
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I kind of feel the same way as Liz Lemon. My annual expenses are pretty high right now because we have a bunch of kids and we are trying to get the house paid off (maybe 4 years left if we are really aggressive, probably in reality more like 8 years away). As the kids grow up and move away (I'm not taking them back), I expect my monthly expenses to drop dramatically.

The goal for me is to quit my current job at age 55 where I'll be eligible to start collecting a pension. Supplement that with some sort of part time employment, and I'd be comfortable. Car expenses, etc. would be way lower. I spend a ton of money on food and gas right now. That should lessen substantially. Downsize the house. Etc.

I look at my in-laws. My father in law drove a truck. Has a decent Teamsters pension. Never had much saved up except for the equity in his house (which he sold for less than $200,000 when he retired). They moved to Florida 12 years ago and couldn't be happier. If he could retire on next to nothing, though he does have income from the pension and social security for he and his wife, then I believe I could to. I would be perfectly happy living his lifestyle.
Calculate the Actuarial Present Value of his pension, and then determine if he actually retired on next to nothing.
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  #35  
Old 03-11-2014, 03:45 PM
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Originally Posted by Aluan View Post
I'm with you there.

Decreasing the needed cash flow for expenses helps a lot in reducing tax payments. If I understand it correctly, if all of your income is from qualified dividends and long-term capital gains and it's below $73k ($36k if single), then you end up paying a 0% federal tax rate.
Really? I did not realize this...

Can you be a bit more specific?

Money that has to come out of a traditional pre-tax IRA still has to be taxed, right? And very few of my capital gains have ever been long-term, but certainly I still pay taxes on them in Schedule D.

Of course, Uncle Sam could also change whatever you tell me...
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  #36  
Old 03-12-2014, 05:56 AM
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I have a hard time understanding why people would get bored if they didn't work. For those who feel this way, do you get bored on the weekend? I'm assuming its not because of money constraints given the OP.
I get bored on the weekends. Some of that has to do with having young kids that limits what you can do, working in increments of a couple hours of free time around their schedules, which is just enough time to do just about nothing. I would need to find something to take on to stay busy if I retired. I enjoy being busy and feeling productive.

I would like to travel more, golf more, go out more. That's all going to cost money. A bare-bones retirement just so I can stop working isn't all that appealing. For now, I generally enjoy work and the people I work with, so I am not looking for a way out.

I could probably find a different job that I would enjoy that would keep me busy - but even if I had the retirement savings to do that and everything else I wanted to do, I would consider another year or two just to pass along some income to the kids to help them out financially early in their adult lives, assuming I still feel the same way about work as I do now.
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  #37  
Old 03-12-2014, 08:03 AM
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I would like to travel more, golf more, go out more. That's all going to cost money. A bare-bones retirement just so I can stop working isn't all that appealing. For now, I generally enjoy work and the people I work with, so I am not looking for a way out.
.
While I do want to retire early, I also don't see the point of doing so if it means you don't get to do the things you enjoy. I can forgo driving new luxury cars if it means I can retire early, but no way am I willing to stay home and eat rice and beans every day to make it happen.
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  #38  
Old 03-12-2014, 08:23 AM
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Originally Posted by nonlnear View Post
....As far as I've figured, the big sticking point is whether one wants to be politically active. If you want to fight for any kind of political change, then you'd best commit to endlessly piling up cash. If not, then there's much less need for millions upon millions of dollars. After all, I'd be fine with a pretty modest beach house and ski cabin. I don't need a big yacht and private island.
Why can't you be politically active in ways other than spending tons of money trying to influence elections? Volunteer for a candidate or political party....make phone calls, knock on doors, put together mass mailings, help with a candidate's website, etc. Or run for a local position and spend your time fundraising rather than spending your own money to get elected.
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  #39  
Old 03-12-2014, 08:42 AM
nonlnear nonlnear is offline
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Originally Posted by Quasi View Post
Why can't you be politically active in ways other than spending tons of money trying to influence elections? Volunteer for a candidate or political party....make phone calls, knock on doors, put together mass mailings, help with a candidate's website, etc. Or run for a local position and spend your time fundraising rather than spending your own money to get elected.
I wasn't talking about getting elected necessarily, but influencing policy substantially. For some that means tossing your hat in the ring, for others it means getting in the PAC game. Fundraising can be a part of it too, I'm not ruling that out. But I like to play to my strengths, so fundraising and running for office are not high on my personal list.

The reason I concluded that being politically active means piling up tons of cash is because when I say "politically active" I mean actually influencing policy, not just getting warm-and-fuzzies from being a part of something. I'm not sure I actually care to make being politically active a goal of mine anyways. We'll see...
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  #40  
Old 03-12-2014, 12:09 PM
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Originally Posted by Arthur Itas View Post
While I do want to retire early, I also don't see the point of doing so if it means you don't get to do the things you enjoy. I can forgo driving new luxury cars if it means I can retire early, but no way am I willing to stay home and eat rice and beans every day to make it happen.


$10M is way more than I would need to accumulate to retire. Somewhere between 3 or 4 would be enough for me, I think.
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