Finance and Economics > Investing and Saving

Americans need $1.4 million to be financially comfortable

(1/4) > >>

Smurf Hunter:
https://finance.yahoo.com/news/apos-americans-takes-financially-comfortable-135500181.html

The article is not great, but it may be a good discussion topic. 

What's missing in this article is the definition of "financially comfortable".

If you are about to retire at age 65 with social security, that's decent.
On the other hand, if you're age 30, have that saved and continue working and saving, that's awesome.
But that's certainly not enough money to give your boss the middle finger, buy a new Porsche and pickup the the tab for the entire bar that night.  Well I guess you *could* do those things, but none of them habitually.

I suppose if invested well along with a massive lifestyle downsize, I could live off the interest, albeit rather modestly.

Does $1.4m mean you'd never have to work or think about money again, or would it just be a huge boost?

bartsdad:
Where also plays into this. Property values and taxes play a huge role in comfort-ability . Also , health care plays a role in this as well.  If I/we retire at 60, which is the current goal, at 1.4M, we would be golden. Our only expenses would be life ( food, ins, travel and such), property taxes, and health care.

Realistically, I don't see many people ever getting to that point in life. Between trying to keep up with the Jones' and living on credit, having a net worth that high is only a pipe dream for most.

Even at a modest 6% return, $84,000 is not a bad gig.

Smurf Hunter:

--- Quote from: bartsdad on May 21, 2018, 04:38:39 PM ---
Even at a modest 6% return, $84,000 is not a bad gig.

--- End quote ---

Especially if your costs are in check.  If you don't have a mortgage and don't live in crazy real estate prices, I fully agree.

Alan Georges:
Here are two books outlining shortcuts to early retirement.  Neither of them is what most people would consider comfortable, but in some contexts they make sense.

Jack had this guy on a while back:
https://www.amazon.com/Early-Retirement-Extreme-Philosophical-Independence/dp/145360121X/ref=sr_1_1?s=books&ie=UTF8&qid=1526943622&sr=1-1&keywords=early+retirement+extreme&dpID=416JeQSqokL&preST=_SY291_BO1,204,203,200_QL40_&dpSrc=srch

And a similar approach:
https://www.amazon.com/Poor-Richards-Retirement-Everyday-Americans-ebook/dp/B0725GG5LK/ref=sr_1_1?s=books&ie=UTF8&qid=1526943638&sr=1-1&keywords=poor+richard%27s+retirement

Both can be summed up by the phrase "extreme minimalism."  But compared to slaving away at a job you hate until 70, that's pretty appealing.

David in MN:
It's a big part of how I think. When I get to $2,000,000 in savings a modest bucket of stocks could yield $60k per year in dividends (that's averaaging a 3% return). That's not a bad life here in the Midwest if you've payed off the house.

But I would question the poll. Charles Schwab users are pretty self-selected. People like me. And I'm all about the numbers and the maths. I'm guessing if you tested the entire population you'd get a much lower number. The "average" American doesn't own any stock or investment vehicles.

I should add  that all traders have a number and we don't share it. [2 million isn't mine.] You get weird results when you ask "money people".

Navigation

[0] Message Index

[#] Next page

Go to full version