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For how long? If I were to somehow come across 3-5 years salary, I would probably be tempted to quit my job and work on something else for a while.
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500k is the smallest number I've seen for this calculation. What kind of investment are you thinking?
500k at 7% per year (common number used for the growth of the market as a whole, and thus the average growth of index funds) means $35k/year, not an unreasonable salary to live on.
You don't have the option of just withdrawing $0 on your "down" years.
p.s. if you can find a risk free 7% return on 500k, open a retirement planning business, become very wealthy.
Also, if you are into minimalism, you can really live on quite a small amount of money, so that can reduce the amount of work you have to do even further.
To put it into perspective here's Felix Dennis's wealth classification table: £1m-£2m: The comfortable poor £2m-£5m: The comfortably off £5m-£15m: The comfortably wealthy £15m-£40m: The lesser rich £40m-£75m: The comfortably rich £75m-£100m: The rich £100m-£200m: The seriously rich £200m-£400m: The truly rich £400m-£999m: The filthy rich More than £999m: The super rich http://www.businesswings.co.uk/articles/Felix-De…
To be clear, this table is considering those with £1m-£2m in assets to be the poor?
Earlier quoted context omitted.
500k at 7% per year (common number used for the growth of the market as a whole, and thus the average growth of index funds) means $35k/year, not an unreasonable salary to live on.
You need to subtract ~3% inflation from that number every year to reach "spending power." Therefore, you're only receiving 20k in spending power and allowing nothing for value appreciation. If you can live on that, more power to you though.
To put it into perspective here's Felix Dennis's wealth classification table: £1m-£2m: The comfortable poor £2m-£5m: The comfortably off £5m-£15m: The comfortably wealthy £15m-£40m: The lesser rich £40m-£75m: The comfortably rich £75m-£100m: The rich £100m-£200m: The seriously rich £200m-£400m: The truly rich £400m-£999m: The filthy rich More than £999m: The super rich http://www.businesswings.co.uk/articles/Felix-De…
Based on the tables in http://en.wikipedia.org/wiki/Cost_of_raising_a_child for the US. I estimated that the cost of raising 2.5 children for 22 years (up to 18 plus college) as nearly $1.4 million. This may be low balling it if you invest heavily in extra educational and extra-circular activities for your children. So I said between 5-10 million as I would also need some margin for me, my wife and retirement. Howeve…
500,000 invested intelligently would give you a yield where you could expect a decent income to live upon, so if you are clever enough that should be enough. Plus it would give you the freedom you wish for, plus a little incentive to do "something" as its not a crazy amount of money....
500k is the smallest number I've seen for this calculation. What kind of investment are you thinking?
Pessimistically, I know I can get 1% interest and easily live off $50,000 / year. Obviously, you would hope to invest in a much better vehicle, figure on paying taxes on your investment income, and hope you stay ahead of inflation.
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I live in the US (expensive east coast). Here, you get average of 1% yield on your bank which is considered high yield btw. So 1% per year before taxes is 100,000. Thats a min. pre-tax that I need. Note that I did not mention anything about investing/markets etc. because those are not guaranteed.
If you ever have a decent amount of money to put away please talk to a reputable financial planner. Also commenting on your "note" that you added on. Investments aren't guaranteed... but putting all that money in a bank isn't guaranteed either. FDIC only insures so much.
Earlier quoted context omitted.
500k is the smallest number I've seen for this calculation. What kind of investment are you thinking?
500k at 7% per year (common number used for the growth of the market as a whole, and thus the average growth of index funds) means $35k/year, not an unreasonable salary to live on.