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No, You can't retire rich at 30 if you sell your startup

tonywright.com

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Re: No, You can't retire rich at 30 if you sell your startup

#201

Post by robryan »

illumin8 wrote: post #105

The main problem with the premise of this article is that someone with $4 million is just going to stick it in a money market fund and live off of the pitiful interest. The interest rate in a money market fund is below inflation, so of course your money is going to dwindle. If you took the same $4 million and invested it wisely, in something like the Permanent Portfolio, which has averaged 9.3% annual returns over th…

Similar things were said about property in America to, that it was a sure thing that had gone up every year for 50 years. Unless your somehow beating the market in general return is going to correlate with risk being taken on.

Re: No, You can't retire rich at 30 if you sell your startup

#202

Post by jdvolz »

Let me make sure I understand this: The supposition is that if you take your millions and put it in a money market account you're not going to earn enough interest to offset inflation? No kidding. How about putting your money into something that makes money at a much greater rate - like a business. Is your risk increased, sure. Is your potential profit considerably increased, absolutely.

Re: No, You can't retire rich at 30 if you sell your startup

#203

Post by ArturSoler »

portman wrote: post #84
muhfuhkuh wrote: post #11

Can we conclude that this is the wistful daydream equivalent of the "Maserati Problem"[1]? I can definitely say that if 30 years we're looking at half a million dollars as a "cost of living adjustment", that world will for the people who don't make that kind of money be Thunderdome. I mean wages have barely kept up with inflation. In the last 40 years (between 1967 and 2007), median wages have only gone up US$10000 (…

The US inflation rate over the last 40 years is readily available from the US Department of Labor based on the Consumer Price Index. http://www.bls.gov/data/inflation_calculator.htm $35,594 in 1970 got you the same as $200,000 today. So why does it strain credulity to believe that $200,000 today will be equivalent to $500,000 in the year 2050? Inflation was much higher over the previous 40 years.

The CPI index is highly "massaged" (looking for a lower than actual value). A better inflation measure would probably be compare commodity prices then and now (copper, silver, gold, oil, etc).

Of course that is compensated partly with productivity increases.

Re: No, You can't retire rich at 30 if you sell your startup

#204

Post by phjohnst »

drusenko wrote: post #98
kscaldef wrote: post #59

Earlier quoted context omitted.

It was more of a rhetorical device. It's not that I can't imagine how to blow through tens of thousands of dollars a month. It's that that lifestyle just isn't appealing to me.

Spending 10's of thousands a month is getting up there, but "blowing through" more than $4k per month isn't necessarily an extravagant lifestyle. My guess would be that you don't live an as expensive a metro area as the author is basing his calculations on. In a place like San Francisco, a few non-frivolous expenses can add up quickly: - Your residence. A decent 2 bedroom place in a desirable part of San Francisco wi…

- Any time/money trade-off

Exactly! It is surprisingly easy to buy something in a store instead of ordering from Amazon and waiting, for +20%, or taking a cab home instead of the subway/bus, or hiring a weekly cleaning service, or buying nicer ingredients and eating out at nicer places because it's convenient, or, ...

Its all the little things in life that really make your experience better and allow you to do the things you want to be doing, not the big ticket items that people traditionally associate with wealth. I think that that is what FYM is all about, really

Re: No, You can't retire rich at 30 if you sell your startup

#205

Post by barry-cotter »

nostrademons wrote: post #128
alister wrote: post #108

Earlier quoted context omitted.

Can we conclude that this is the wistful daydream equivalent of the "Maserati Problem" I'll go out on a limb and say that even normal retirement planning (50 years into the future) is a Maserati Problem. Everybody that makes very long-term projections about money -- whether it's the gloomy "interest on $4m won't last 40 years" variety to the rosy "save $300 a month and the compound interest will make you a millionair…

"There should be some trillionaires walking around whose ancestors started saving in the Renaissance when modern banking began -- but there aren't." Carlisle Cullen. ;-) Anyway - this is a really good point, but I'll point out something else. Most of the wealthy would-be trillionaires whose fortunes got wiped out passed down another inheritance: their genes. Those same disasters that wipe out the savings of the rich…

Most of today's middle class is descended from the kings and nobility of the high middle ages.

Not true for Britain. The peasantry did mostly die out but the nobility did very badly as well. The middle classes were the forefathers. Sources etc. in "Farewell to Alms" by Gregory Clark

Re: No, You can't retire rich at 30 if you sell your startup

#206

Post by loewenskind »

jmhobbs wrote: post #38

I live in the Midwest, and I think I would have a hard time spending 200K a year. Maybe my idea of happiness is wrong?

Right or wrong is difficult to pin down but living in the Midwest isn't something that most of the developed world would aspire to.

Re: No, You can't retire rich at 30 if you sell your startup

#207

Post by yummyfajitas »

jimbokun wrote: post #171
yummyfajitas wrote: post #94

Earlier quoted context omitted.

I'm not attempting to apply Moore's law, merely the past 40 years of growth to the next 40 (just as the original poster tried to do). In any case, the point I'm making is that "middle class life" needs a time period to be attached. "Middle class health care 1970" would be pretty cheap today - any medicine available back then is out of patent, and dying of untreatable cancer is pretty cheap. "Shelter 2010" is 60% bigg…

""Middle class health care 1970" would be pretty cheap today - any medicine available back then is out of patent, and dying of untreatable cancer is pretty cheap." I question whether availability of drugs is the best indicator of overall health. We are also a lot more sedentary, the quality of our food is probably not as a good, and we are a lot heavier. Given that, how many drugs do we need to just break even, healt…

I'm not using drug availability as an indicator of health, I'm using it as an indicator of health care. My point is that comparing the cost of health care in the past to health care today is not a fair comparison, since health care today includes vastly more services and products.

As for health, if people enjoy chips more than not being fat, I'm not going to tell them their choices are wrong (at least until 2014, when their choices are inflicted on me). Broccoli is available, they are free to eat it.

As for relative status, only one kid can be the first with a new toy in any era. In principle one could compare opinions and attitudes, but my guess is that they will be roughly constant over long periods. You can find find "kids these days, get off my lawn" and "my parents had it better" articles in newspapers of any era, for example. All I'm really assuming is that having a playstation or viagra is better than not having it.

Re: No, You can't retire rich at 30 if you sell your startup

#208

Post by [deleted] »

sedachv wrote: post #158
yummyfajitas wrote: post #73

Earlier quoted context omitted.

Please tell me which point I'm wrong on. Do most people not live in larger houses, enjoy greater automation of housework, enjoy larger and better entertainment technologies, and benefit from medical procedures which did not exist in 1967?

Not outside of the United States, Western Europe, and some parts of Asia and South America. What makes you think the same thing (over 50% reduction in GDP and almost ten million excess deaths) that happened following the bankruptcy of the USSR can not happen once the US is unable service its debt any longer?

[deleted]

Re: No, You can't retire rich at 30 if you sell your startup

#209

Post by [deleted] »

tokenadult wrote: post #188
jerf wrote: post #174

Earlier quoted context omitted.

Actually, one of my (many) issues with political discourse today is that thanks to inflations, "the rich" has been defined down brutally over the past 30 to 40 years. Anyone currently making $250/year, yeah, if they're hurting it's their own damn fault for overreaching, but that is very rapidly becoming merely upper middle class. Meanwhile, neither our legal/tax nor our social definitions of "rich" are being updated…

And yet many of the things that average people enjoy today could not be obtained with any amount of money when my grandfather was alive. Where I live, today, an annual income of U.S.$250,000 is very comfortable indeed (and rather rare).

[deleted]

Re: No, You can't retire rich at 30 if you sell your startup

#210

Post by jimbokun »

yummyfajitas wrote: post #207
jimbokun wrote: post #171

Earlier quoted context omitted.

""Middle class health care 1970" would be pretty cheap today - any medicine available back then is out of patent, and dying of untreatable cancer is pretty cheap." I question whether availability of drugs is the best indicator of overall health. We are also a lot more sedentary, the quality of our food is probably not as a good, and we are a lot heavier. Given that, how many drugs do we need to just break even, healt…

I'm not using drug availability as an indicator of health , I'm using it as an indicator of health care . My point is that comparing the cost of health care in the past to health care today is not a fair comparison, since health care today includes vastly more services and products. As for health, if people enjoy chips more than not being fat, I'm not going to tell them their choices are wrong (at least until 2014, w…

"Broccoli is available"

In some inner city areas, even this is debatable.

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