"Suppose you're one of five people who have been selected by a mysterious philanthropist to participate in a contest. The five of you all have comparable debt-levels and costs-of-living, as well as similar, middle-class financial situations. You're all roughly the same age, equally healthy, have the same number of children, and you all live moderately low-risk lifestyles.
Privately, and one by one, a representative of the donor approaches each of you with a blank check and a pen, and poses the following question: How much money would you have to be paid, right here and now, to retire today and never receive another dollar of income (from any source) for the rest of your life?
The catch this time is that whoever among the five players writes the lowest amount on the check will be paid that sum. The other four players will get nothing."
taken from: How Much Money Is 'Enough'? This Simple Thought Experiment Gives You an Exact Number to Aim For
this is such an interesting question! the above article says that "One way to calculate that point is to figure out how much money you'd need to make decisions based entirely on enjoyment and impact, without pressure to earn. This is the goal of the catchily named FIRE movement (for financial independence, retire early). Its boosters generally say that 25X your expected annual expenses is enough. So if $50,000 a year is enough for you to live comfortably, you need to save $1.25 million."
based on that thinking, I only need $650k. I make about $50k a year before taxes, and manage to save about 30% of my paycheck after taxes. which means I only need $26k a year to live on. that being said, I would love to some savings because 'merica and our lack of healthcare, and I'd want to factor in inflation. plus, all my grandparents lived to at least 80, and both my parents should hit that easily. which means I have maybe 45 years of life left. so 45 x let's say $30 is $1.35 million. I'd round up to $1.5million, and probably just to be safe, ask for $2m.
I wonder if I'd win.
...the flaw tho, is that the story says you can never have any income (from any source) forever. tho the FIRE equation above almost certainly factors in bank interest.
1 comment:
j, somewhat arbitrarily I think, said $7m.
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