Quit my job? Yes. Retire? Not really. I would probably spend my time trying to write the great American novel or get a PGA card or some crazy pursuit that may are may not yield any income. I would never be able to just run around all day partying, traveling, etc. without any purpose in life.
I am about 15-20 years from retirement and am no where close to being able to retire early. Even at age 67+, the idea of just taking up hobbies with no real purpose scares me.
What do you and your spouse do that you make 2 million a year? That is rarefied air for someone in their 30s. My wife and I are both physicians and we make around 850k a year combined (me 700k, her 150k part time). My best guesses would be:
1. FAANG elite engineers with stock options
2. Tech entrepreneur founders
3. Dual income physician specialists.
Without getting too specific. Wife makes roughly 600k. She is a physician who works in Pharma with a lot of highly specialized knowledge. I make 1.4m target comp. I am a senior executive at a mid-level Fortune 500 company. Not C-suite but report to C-suite. Comp is roughly split between Base/Bonus and Stock. My wife is pretty stable, mine is… highly unstable.
Absolutely. I'd buy a $10MM home and live off $500k/year returns from the remaining $10MM.
Are you offering?
That $500k/year is 'only' $300k after tax (interest is taxed as income). The $10MM house will cost you minimum $100k/year to own. $200k/year after tax not including housing expenses is not exactly chump change, but if you have a family and have to buy your own health care, and want to travel a bunch because you're retired, then you'd have to watch your expenses. Notably, the real (inflation adjusted) value of your $10mm in investments will decline every year, and if interest rates drop, so will your income. With 50+yrs left to go it doesn't sound that comfortable to me. Maybe better to do a $2mm house and live off $18mm of interest income, and reinvest some.
Anyhow, I'm 45 and have a net worth substantially more than $20mm, but I do continue working. I ask myself every day why I do it as I've been doing 'this' for a long time and no longer enjoy it. The only answer I can come up with is risk management and lack of something different I really want to do. There are, of course, many things I'd rather do than work, but most of them aren't practical when you have kids in school.
Absolutely. I'd buy a $10MM home and live off $500k/year returns from the remaining $10MM.
Are you offering?
That $500k/year is 'only' $300k after tax (interest is taxed as income). The $10MM house will cost you minimum $100k/year to own. $200k/year after tax not including housing expenses is not exactly chump change, but if you have a family and have to buy your own health care, and want to travel a bunch because you're retired, then you'd have to watch your expenses. Notably, the real (inflation adjusted) value of your $10mm in investments will decline every year, and if interest rates drop, so will your income. With 50+yrs left to go it doesn't sound that comfortable to me. Maybe better to do a $2mm house and live off $18mm of interest income, and reinvest some.
Anyhow, I'm 45 and have a net worth substantially more than $20mm, but I do continue working. I ask myself every day why I do it as I've been doing 'this' for a long time and no longer enjoy it. The only answer I can come up with is risk management and lack of something different I really want to do. There are, of course, many things I'd rather do than work, but most of them aren't practical when you have kids in school.
I'm 46 and our HHI is only about 200k pre-tax currently, so 300k after tax would be a massive upgrade. I could probably make do with, like, an 8MM house as well. I just want it to be on the lake.
That $500k/year is 'only' $300k after tax (interest is taxed as income). The $10MM house will cost you minimum $100k/year to own. $200k/year after tax not including housing expenses is not exactly chump change, but if you have a family and have to buy your own health care, and want to travel a bunch because you're retired, then you'd have to watch your expenses. Notably, the real (inflation adjusted) value of your $10mm in investments will decline every year, and if interest rates drop, so will your income. With 50+yrs left to go it doesn't sound that comfortable to me. Maybe better to do a $2mm house and live off $18mm of interest income, and reinvest some.
Anyhow, I'm 45 and have a net worth substantially more than $20mm, but I do continue working. I ask myself every day why I do it as I've been doing 'this' for a long time and no longer enjoy it. The only answer I can come up with is risk management and lack of something different I really want to do. There are, of course, many things I'd rather do than work, but most of them aren't practical when you have kids in school.
I'm 46 and our HHI is only about 200k pre-tax currently, so 300k after tax would be a massive upgrade. I could probably make do with, like, an 8MM house as well. I just want it to be on the lake.
In all seriousness, I agree it might be a little irresponsible to buy an 8MM or 10MM house with just 20MM net worth.
In real life if this happened, I would probably look more in the 5MM range. My current house is just a bit over 1MM, so I do have that and some other assets.
$5MM house with $15MM invested drawing 4% annually leaves income of $600k which would be absolutely plenty. I'd spend my days running, boating, cooking, and working on personal creative projects that may or may not generate any money. And we'd travel a good amount as well, but both my wife and I are comfortable with (relatively) frugal travel, so we wouldn't need a massive budget for that.
Would it depend on income? Like if you are making enough that it's silly to walk away?
I don't spend much
I enjoy work but my job is all consuming. I don't think I'd want any other type of job though, since I really care about autonomy and being responsible for outcomes
Figure I live to 75, at 38 that means 37 more years. Even without any interest that is $540K per year. So yeah, I am walking away...no I would have been RUNNING away.
Retiring healthy at age 38 isn't wise. If a person hates their job and has 20 million at age 38, consider quitting job and start a business. Anything, a gas station, a small grocery store, a bistro, a coffee shop, etc. Retire at age 38 with 20 million dollars? Not wise. Powerball and Megamillions lottery winners, much older than age 38 and much wealthier than 20 million have gone bankrupt.
Retiring healthy at age 38 isn't wise. If a person hates their job and has 20 million at age 38, consider quitting job and start a business. Anything, a gas station, a small grocery store, a bistro, a coffee shop, etc. Retire at age 38 with 20 million dollars? Not wise. Powerball and Megamillions lottery winners, much older than age 38 and much wealthier than 20 million have gone bankrupt.
Biased sample. Most lotto winners have no experience with money and are dumb enough to play the lotto in the first place.
nearly everyone with that much money ends up withdrawing from the real world. You'll go hide under the equivalent of a rock, where noone can find you except other rich people.
You will live in isolation, with a desolate soul and a vacant heart, with no purpose in life. All your other rich-people friends will be the same way. One by one you will all go mad, like Phil Spector, like O.J. Simpson, like Britney Spears.
Would it depend on income? Like if you are making enough that it's silly to walk away?
I don't spend much
I enjoy work but my job is all consuming. I don't think I'd want any other type of job though, since I really care about autonomy and being responsible for outcomes
Life is too short. I would leave my corporate job in a heartbeat and do something I love with my time.
Retiring healthy at age 38 isn't wise. If a person hates their job and has 20 million at age 38, consider quitting job and start a business. Anything, a gas station, a small grocery store, a bistro, a coffee shop, etc. Retire at age 38 with 20 million dollars? Not wise. Powerball and Megamillions lottery winners, much older than age 38 and much wealthier than 20 million have gone bankrupt.
Biased sample. Most lotto winners have no experience with money and are dumb enough to play the lotto in the first place.
Place $2 on a Powerball @ $700,000,000 (before converted to lump sum & before federal & state tax) is actually a wise bet. College educated multi-millionaires have won large Powerball & large Megamillion more than once.
Do you consider yourself a finance expert? What percent of your portfolio, if removed monthly, quarterly or annually will allow your money to last in perpetuity? Go ahead and tell me you're an engineer or m.d. I am been down this road.
nearly everyone with that much money ends up withdrawing from the real world. You'll go hide under the equivalent of a rock, where noone can find you except other rich people.
You will live in isolation, with a desolate soul and a vacant heart, with no purpose in life. All your other rich-people friends will be the same way. One by one you will all go mad, like Phil Spector, like O.J. Simpson, like Britney Spears.
Like with anything, you take the good with the bad.
I challenge you to list the last 10 winners with their education and net worth prior to winning. There is an inverse relationship between income/edcation and how many times people play the lottery.