Poll: What number would make you say "I am financially independent"?

Yes, that's exactly what I'm saying. If I had $4MM, I'd spend a small chunk up-front, and then I'd have enough left such that - if I invested wisely - I would most likely not have to work again, while being able to do some traveling. I'm not talking about exotic vacations to Monte Carlo to go gamble away $500,000 a night or anything, mind you. I'm talking about flying to $SOMEWHERE_COOL, and spend a week or two mostly lying on the beach reading and people watching.

And at worst, that would be enough that if I did want to work again, I could be extremely picky about what kind of work I'd take on, and when, and where. That's a kind of independence in its own right.

You also have to keep in mind that I'm an older guy (relative to this crowd) so barring major breakthroughs in medical technology, I don't have to stretch my money out as long as somebody who's in their 20's or whatever.

At 2% you can just spend the capital and you'll be good for 50 years. Insert 13 year old HN readers looking horrified and 50 year old HN readers looking rather optimistic.

It gets hard to spend lots of money, especially if you are into variety. Yes living 1st class on a cruise ship and touring the world would be expensive, but I'd pretty much sick of it for the rest of my life after about six months. Then its on to camp in each national park for a month, which would take a pretty freaking long time and cost practically nothing other than time. On to the 30ft cruising sailboat until I get sick of that, again not terribly expensive. Maybe tour Europe, rather expensive until I get sick of that.

My grandparents ran out of things they wanted to do before they ran out of wealth and health, which is the best way to go. They eventually settled down in a cottage on a rural lake and just enjoyed life. I'd probably end up about the same place.

Not really. A hot mobile app can sell for that much, and doesn't require anything more than a laptop and some time.

"start or buy a small local business (restaurant, cafe, club, etc.)"

Looking at the life experience of local pro athletes, the most likely way to retire with a very small fortune while owning a small business is to start it with a very large fortune. There's actually a business model oriented around taking money from athletes and home equity loan cash out refinancer types, then buying the asset back for pennies on the dollar at the bankruptcy to resell back to the next sucker with some money. At least in the cash businesses, you can never undercut the people who are a front for laundering money, like the recently busted local candle (and weed) store.

Also the experience seems to bifurcate where the owners are either stuck working 80 hour weeks, or they hire someone else to be the general manager in which case owning the business but having nothing to do with day to day operations has all the interest and excitement of buying stock online.

> To be fair, 2008 was the year the current financial meltdown started

No, that's not being fair at all. That's being irresponsibly optimistic. Let's say it is now 2005, you have a $1,000,000. You follow cpursley's advice, and put it in a well managed ETF/mutual fund, expecting to get 8%-12%. You get that for the first year and second year - and then you get -50% (which, if you look at your starting sum is "just" -40%). Now, you need 8 good years just to go back to where you started.

2005 is unfair? Go back to 1999, and check yourself at the end of 2001.

1999 is unfair? Go back to 1986.

My point being, the "common knowledge" 150 years long term average of 7%/year is irrelevant, for two reasons:

a) market dynamics have changed significantly in the last 10 years or so; the 140 years before that aren't as informative as the last 10 - and the last 10 are abysmal.

b) even if the 150 year statistics were relevant - what you care about is your 10-30 year horizon. There are just too many unlucky events during those 150 years that you are very likely to have a 30-50% loss in one of the years of your 10-30 year horizon -- which might take you 50 years (that you don't have) to average out and come out on top.

Anyone who really believes the 8%-12% numbers can borrow at 8%, leverage ad absurdum and basically print money. Which, incidentally, is the empirical proof that 8% is not attainable.

(P.S - CALPERS assumed a modest 8% return. That's why they're now only 50% or so funded http://www.calwatchdog.com/2012/03/22/calpers-funding-might-... . If you can get them 8%, they'll give you $20M/year in salary. Really.)