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  #61  
Old 06-25-2014, 04:50 PM
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mathmajor mathmajor is offline
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I don't know why I'm projecting out this far being age 25, but I'm getting $2.5-$3.5MM under various assumptions (today's dollars). Like $300k/yr until age 80? Fun to think about but nobody knows what'll happen. Just gonna keep working on my first 100k
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  #62  
Old 06-26-2014, 11:12 AM
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On a related note, is it worth it to you to work 20% more to get paid 20% more and retire in your 40s and 50s? Or would you rather work 9-5 and retire at 60?
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Old 06-26-2014, 11:27 AM
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Originally Posted by hellomath View Post
On a related note, is it worth it to you to work 20% more to get paid 20% more and retire in your 40s and 50s? Or would you rather work 9-5 and retire at 60?
As a hypothetical, maybe - if that 20% more work doesn't crush my current recreation.

But treating it as a realistic question, my current professional situation is such that I don't believe I will have to work any harder to get a raise quite a bit larger than 20%. My last raise (from an external move) was 40% and it was a HUGE reduction in workload. My current situation seems to be unfolding such that with my next move, either internal or external, I'll be looking at something north of 30% for very little change in workload pretty soon. Compensation in my current situation is more determined by upward visibility than amount of effort.

The notion that effort and compensation are proportional is generally true on average for most jobs, but there is so much variance that it's not really all that relevant to many individual scenarios IMO.
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Old 06-26-2014, 12:13 PM
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An early actuarial career (EL salary -> 2x that) doesn't come with anything like 2x work, I find.
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Old 06-26-2014, 12:18 PM
Yodamon Yodamon is offline
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What if instead of calculating based on the year you want to retire, you base it on the # of years expected to live past X retirement age? Someone could retire at 65 and live to 100, but what if someone is only going to live to 75 then they could retire at 40 (assuming at 40 they have funds to live to 75 but not 100)?
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Old 06-26-2014, 12:27 PM
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On a related note, is it worth it to you to work 20% more to get paid 20% more and retire in your 40s and 50s? Or would you rather work 9-5 and retire at 60?
I think it's a complete myth that you work harder for more money, especially within the same industry/company.
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Old 06-26-2014, 12:40 PM
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The stock market will return much more that the 3 to 5 percent at which you can borrow mortgage money these days.
Are you teetering on the precipice of total mental retardation? It would appear so.
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  #68  
Old 06-26-2014, 12:44 PM
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I think it's a complete myth that you work harder for more money, especially within the same industry/company.
The ratio might be off, but the concept is similar.

Our director goes from one meeting to the next on a daily basis. Guess when he reads and replies his emails?
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  #69  
Old 06-26-2014, 12:54 PM
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I think it's a complete myth that you work harder for more money, especially within the same industry/company.
IMO it's true on average (per capita, not dollar averaged!) basis, but primarily because it's largely true in many labor jobs.

The claim become slightly closer to plausible for professional jobs if you stretch the term "harder" to something more like "productively" to account for the value human capital brings to the table. Still not sure if it's actually true for a lot of professional/managerial work though, but maybe a little closer to plausible.
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  #70  
Old 06-27-2014, 09:14 AM
Liz Lemon Liz Lemon is offline
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There's some insight here, but it needs refinement.

Your passive income now not only needs to feed your current living expenses, it needs to feed the growth in your asset base to cover future inflation of your current living expenses.

Secondly, why the heck would you pay off your mortgage early? The stock market will return much more that the 3 to 5 percent at which you can borrow mortgage money these days. Also, and this is important, the biggest hedge against inflation that most people have access to is a fixed rate mortgage. If and when inflation increases (and it really cannot go down any further) then owing dollars at the pre-inflation fixed rate is like free money added to your personal balance sheet.

Let's say your mortgage balance is 100k. It is better to own the house, owe 100k on it and have 100k in the bank than to own the house, owe nothing, and have an empty account.
I understand that my current living expenses will increase roughly in line with inflation. My goal has been to follow the theory of dividend growth investors. By investing in companies that belong to the dividend champions list (companies that have not only paid dividends, but increased them annually for 25 years or more) my passive income stream already has a nice built in inflation protection. So that is how that would work.

The mortgage payoff is a personal decision from the standpoint of someone who doesn't like debt. To me, it just represents a level of freedom and security to not have to make that monthly mortgage payment. Also, we are saving quite a bit of our income now. With the market at or close to a peak, I'm nervous about funneling even more into it. It is becoming a little harder to find stocks that I think are fairly priced. So at this point, I would just be putting the extra cash into savings and we know I'm not beating the mortgage interest rate in a savings account.

Again, it's all personal and I know theoretically I should be investing the money elsewhere since theoretically I can get a higher return. But this is what feels comfortable for me and I think we have a nice balance. Again, it's not an either/or situation for us. Like "either we pay down the mortgage or we invest in stocks". We are able to do both and I think I'm finding good balance this way.
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