Jack Bogle would have you park it in a balance of broad index funds, and generally don't touch it, nor even think about it:
https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_...
https://www.investopedia.com/articles/investing/030916/buffe...
So, if trying to steer people away from obsessing about growing/hoarding more money than they'll ever need... maybe just steer away from Buffet altogether, and towards Bogle.
(Bogleheads can also become a time-consuming activity, but more likely to instill the message of just stuffing it in total-market index funds, keep it boring, and don't think about it.)
On the other hand, it's exactly this attitude that's resulted in my spouse handling all of our finances. Maybe she wakes up at 4am fretting about the stock market; if so, she doesn't tell me about it.
His argument is that since stock generally goes up, if you're not constantly checking, when you DO check it will be higher than it was before and you'll feel positive about it.
10 million in the bank and you can start to "be secure".
Though it all depends on what QoL you want in retirement. I know a guy who retired early and happily spends 70% of his time playing video games. He avoids bougie foods and goes on a couple of nice trips every year.
You can buy a lovely house, support a family, 80k is still a full salary for most people and will certainly support 'standard day-to-day' living, and if you want a little more money for your holiday in the Caribbean you can always take on some cushy exec/advisory work a couple of days a week.
It is, but a burger and fries and Five Guys cost me $20 yesterday, and that isn't exactly living it up.
The nice pizza places around me charge nearly $30 for a Pizza.
tl;dr shit is expensive and it is really easy to get excited with an Uber order and realize dinner from an Indian takeout place is going to cost $120. (I've pretty much give up on Uber and I just go pick up the food now, saves a good $20-$30, and some restaurants give sizable discounts for NOT ordering through a food delivery app!)
We will all have different definitions of living it up, but I would say you can live a good food lifestyle if you can afford HelloFresh/BlueApron or high quality ingredients for cooking and go out 1-2 times a week.
I did this. I cashed out in my 20s, bought a $2m home in the middle of nowhere (that goes a long way out here), and live out my days in my workshop surrounded by singing birds, bees, wildlife, trees and gardens, with views across lakes and plains.
And some cosmopolitan wants to tell me, as they cram another million people into gridlocked high-rises in their smoggy grey hellhole, that we in the country are bad for the environment? Or that the soulless crowds you have to navigate through every morning and evening are friendlier than the neighbours and strangers who wave and chat everywhere I go?
If you're able, get out of the cities. Especially if you have children. You have no idea what you're missing.
Uh yes, if you shove a million people out in the middle of nowhere, you have to cut down all the nature, remove the wetlands, pave a bunch of really wide roads, and now all of a sudden your paradise is a bland soulless sub-urban hellscape that is no longer environmentally friendly.
As for gridlocked, I can walk to multiple bakeries, grocery stores, and parks. The vast majority of my driving is to places that are less than 15 minutes away.
My rural friends talk about taking a quick trip that's only 90 minutes away. 90 minutes there 90 minutes back, shit, that's 2.5hrs extra spent driving compared to my 30 minute round trip commutes. If I go over the last 5 or 6 months I haven't lost a total of 2.5hrs to gridlock.
> Or that the soulless crowds you have to navigate through every morning and evening are friendlier than the neighbours and strangers who wave and chat everywhere I go?
Why do you think people in the city are soulless? Cities are bastion of art and creativity.
I say high to my neighbors all the time, we get together for drinks and we swap baked goods. This is made all the easier by how close we are together.
Indeed, once I moved into the city, meeting people became easier, and the people around me are friendlier.
Cruising through the countryside at top speed to a larger town with the windows down and the radio up for an hour on the rare occasion I need something urgently is a pleasure compared to sitting in bumper-to-bumper traffic to and from work, or crammed into a train with everything around me being suspiciously sticky and slightly smelly twice per day. We have what we need. You'd be surprised how little you miss the overwhelming number of choices and conveniences you have in the city. Anyway, I'm not that remote - I do most of my shopping online so everything is delivered to the door (albeit a day or two later than for you).
It's the look in their eye, or their nature and priorities implicit in their choices. Cities are utterly bereft of soul, spirit, meaning, purpose, culture, etc. Whatever they do have in these respects seems to me like a cynical parody of their true form. They will convene a meeting for consultants to identify an urban area in need of beautification, commission an agendered hippie to plonk some monstrous perverted multicolour sculpture there for millions of dollars and boast about it like this isn't an insult to everything pure, and decent, and good in this world.
The baked goods trading sounds really wholesome, I'm genuinely glad you have that.
Still, there's a good reason city-folk come out here for rest and relaxation while I dread going into the big smoke and get the hell out as soon as I'm done doing what I need to do.
All of this is kinda foreign to me, because I've never had a "bad" commute. Right now I'm 14 minutes from work one-way, no traffic in my direction.
This is rambly, and I think you're both making a solid points about something that is fundamentally subjective. So I'll just say that I feel sorry for all of you guys that are hating life during your commute.
The saying ‘concrete jungle’ is so far off the mark. There’s no similarity between a city and a real jungle.
Once you’ve been out for a while, cities are clearly concrete zoos.
Cities are great! Cities have people, energy, stuff.
I never said migrants, I was talking about what happens if a million city dwellers take your advice and decide to move to the country. It'd be an environmental nightmare!
> compared to sitting in bumper-to-bumper traffic to and from work
Again, I rarely have bumper to bumper traffic, when I do, it is for a handful of minutes.
> You'd be surprised how little you miss the overwhelming number of choices and conveniences you have in the city.
In a given week, all less than a 15 minute drive:
Gym class with my son Swimming classes with my son BJJ classes Weekly library visit Weekly shopping trips with my son
Weekend choices are the Zoo (15 minutes away) Aquarium (an entire 20 minutes away!), or parks (plenty to choose from in walking distance). Heck there is now an indoor ice skating rink (less than 20 minutes away).
All of these are things I do every week. (Except for ice skating, I'd fall on my arse).
Of course there is plenty more. Just because I'm in a city doesn't mean I'm stuck in the city, in under a 2 hours drive I can reach the following:
1. Multiple ski resorts 2. An almost uncountable number of incredible camp sites 3. Countless small ocean side towns 4. Multiple amazing mountain day hikes
A bit further away there is an actual honest to goodness rain forest (3.5hrs) or I can go play on an active volcano (3.5hrs)
Lake Washington is just a handful miles away, everything from renting a boat for the day to seasonal hydroplane races to lake side picnics.
If I'm bored, I can go down to a local comedy club, hit up a poetry reading, multiple books clubs, or just go see a live concert. Seattle of course also has a huge sports scene, not my style, but between Football, Soccer, Baseball, and Ice Hockey, people who do like sports are pretty well entertained.
I was not expecting any of this when I moved to the city. I did not realize how pleasant live is here. I'm not living in Manhattan or London. The city isn't smog covered. If you ever fly into Seattle you can look out the airplane window and see how green everything is.
> Cities are utterly bereft of soul, spirit, meaning, purpose, culture, etc.
I mean, grunge, punk, and even multiple sub-genres of EDM, all sprung from cities. If you want to be incredibly elitist, plenty of classical music (and art, and paintings!) came from urban areas as well.
Saying cities don't have purpose or spirit is silly. I've travelled to multiple world cities, and each one has a completely different spirit. You may not like the spirit of a given city, and that is OK, but saying they don't have spirit isn't being honest. Given the site we are on, we can likely agree that the spirit of the Bay Area is technology at any cost, hustling and selling your ideas and trying to go big or die trying. Someone can say that spirit sucks, but no one can deny that it exists!
> commission an agendered hippie to plonk some monstrous perverted multicolour sculpture there for millions of dollars and boast about it like this isn't an insult to everything pure, and decent, and good in this world.
So ignore the civic stuff? The problem with public art pieces is that they have to not offend anyone, so after every interest group in the world has filed their objections, the artwork often ends up being super boring.
Meanwhile, plenty of cities have entire blocks set aside for street artists to make incredible murals. Local artists have open workshop days where you can come in and talk to them about what they are making. Guerrilla art exists. One time some friends and I stumbled across a tiny gallery hidden in an unlabeled building that was open at 10pm! Just, walking around, boom, art gallery.
> while I dread going into the big smoke and get the hell out as soon as I'm done doing what I need to do.
If you are going to the downtown part of a city, yeah, it is stressful and it sucks. Likewise, if I go into a rural area and head to a rendering plant, or a tire factory, that also sucks, but it wouldn't be fair for me to highlight the worst part of rural living with the best part of rural living!
Meanwhile one of my most memorable experiences in London was just walking around and just randomly stumbling onto Columbia Flower Road ( https://en.wikipedia.org/wiki/Columbia_Road_Flower_Market).
Or the time I was staying in a NYC AirBnB and I woke up one morning to a food festival outside my door.
The amazing and talented buskers in Mexico City.
The great street food that is available almost everyplace except in American cities (ugh).
And to be with all of this, I'm not saying rural living has no advantages. As a child I used to spend every summer down with family by the Russian River in California, and even to this day I have friends in rural places that I go to visit, dropping in for a day or sometimes a week.
I totally understand what the nice parts of that are, but I didn't understand the nice parts of city living until I moved from suburbia into a city.
And I am sure the answer is not as simple as it sounds. But my guess, there are too many people in the world, and living in the house in that sense is a privilege.
This sort of trade-off between pleasantness and damage is common. For instance, I like traveling the world and in first class you've got half the seat-density of economy so the environmental cost is massive. But it's really nice and there's no way I'd prefer not to do it. It's just also bad for the environment.
My wife and I just returned from a two-week long vacation in Patagonia. It's a stunning place and you'll be surrounded by unbelievable natural beauty. But the same lovely glaciers I mourned the melting of, I contributed to the melting of by flying there. Both things are true.
There are a _lot_ of people on this site who have no idea what actual rural looks like.
Not that 80k is the lifestyle of a king, but it is plenty to get by with if all you are buying is insurance, food and entertainment.
Daycare in my area is ~2400 a month (not the super fancy daycares either, they are over 3k a month). If you want to fully fund a 529 college fund, that is 30k a year for 15 years[1].
So right off the bat we have 50k a year in expenses for having a single kid, not counting feeding them and other activities. If you choose public school, then that number drops after the kid is 5, but if you want a private school that is 15k-35k a year.
tl;dr 2 million in the bank isn't enough to raise a single kid w/o supplementary income.
If you retire early you'll have to pay for your own health insurance, a Platinum plan is ~700 a month, not counting any other expenses that you have to pay. 7k a year right there.
Cars cost $ to purchase and maintain. If you retire in Manhattan you can get away with not having a car, maybe Boston if you are lucky. Most other US cities require a car and that is going to average around 10k a year, assuming you have a mid-range car and that somehow you don't need to buy a new car during your retirement.
If all you do is shop at Costco (perfectly doable!) you'll be able to keep food costs down, although you'll have to spend the time and money driving to a Costco.
Outside of Costco, I'm paying around $200-$300 a week for groceries for 3 people. I found this lovely quote
> As far as specific food items go, a dozen eggs and a pound of apples in Seattle costs $3.54 and $2.71, respectively.
Which, while written in August of 2023, is already horribly out of date. (For whatever reason eggs got super expensive recently...)
Figure 1k a month for food, if you never go out to eat, ever. Also no drinking alcohol of any type, that'll blow the budget.
So we are up to 29K a year in expenses so far, just eating and driving around.
No gym membership, no sports or hobbies, no vacations. No streaming services, no cable TV, no internet, no utilities, etc.
Figure another 1k a month for those things and you are now spending 41k a year.
Assuming no kids and a paid off house, 80k is livable, but it'll be somewhat bare bones for a person who "retired with millions in the bank".
Which is kind of messed up, when I graduated college 80k was a really good lifestyle, but inflation did its thing, and so did the rising CoL in Seattle.
[1] The absurd price of college is a huge expense for parents who don't want their kids to be stuck with lots of debt. Having to pony up 30k a year is an obscene necessity driven by the horrid cost of a college degree in America.
If you are retiring early, why are you paying for daycare?
Many people would love to retire early just to be able to spend time with their children.
Although IMHO daycare has plenty of benefits, and I actually do know of people who send their kids to 1/2 day daycare just for the educational benefits and socialization, so that is still 1k a month or so.
I've also noticed that the stay at home parents tend to enroll their kids in more activities, the cost of which quickly adds up.
Being with a toddler 24/7 is a ton of mental work, especially in modern western societies where we don't have extended support networks of family and friends.
IMO move. If the life you want is more rich than your funds, congrats you’re still working - but you still have a massive bump.
So weird to me lol
Over the last couple of decades, tuition has gone up 2x inflation, which means figure 6-7% increase in college costs per year. That sadly adds up to around half a million.
On the index funds, I'd probably outspend returns.
I'm all the time telling people who claim they can't afford housing because it's 1-2 million to move.
Maybe we're both wrong and the more we get the more we want.
Maths: - 7MM post tax (let’s say) - Less 2MM for 2 houses (rates being what they are you’ll likely not mortgage both properties, or even one; if you do your monthly burn is so much higher it comes out in the wash). - 4% because you read about FIRE - 200k pre-tax (you tax burden should be low, maybe 15%) - 170k post tax for your family. If you live anywhere higher than average COL you might find yourself feeling a bit like a large reptile at times.
Absolutely would not recommend putting funds in large cap indices if you're planning to retire off portfolio cashflow.
You get close to 4.5% cashflow (interest plus imputed income) on 20y treasury bonds alone, for example.
Why take pricing risk to your income when you can get it directly in dividends/distributions that are very secure?
“4%” (Trinity study style I mean) is the pop culture number that accommodates down markets and inflation over 50 years, to a first approximation.
The days of buying an index and selling 4%/year being your best strategy are past. At least until/when yields decline again.
If you're strategic and barbell your portfolio somewhat, you can generate around 10% with moderate risk (and this is 10% distributions/dividends, not including any capital gains).
The best outcome for retirees is to build a solid income portfolio and then hope that inflation really does subside and valuation multiples compress again, which would leave you with significant capital gains while portfolio income is preserved.
If inflation resurges or remains moderately high, capital gains will be more limited.
You tell me, we live in the same world. Humans universally have serious issues with greed, selfishness, and all manner of other ugly things. We are not basically good, we are basically evil.
A twisted man has a sort of twisted Midas touch, so that even if he has natural abilities in managing wealth things become tainted. He may even realize he's a dragon (speaking as a fellow twisted man). C.S. Lewis had some things to say about people who suddenly realize they are dragons in "The Voyage of the Dawn Treader."
The problem isn't wealth, it is our hearts.
That sounds like the dragon, seeking to deflect blame away from the treasure hoard it is protecting, if only for itself.
The ones who were capable of being happy before money continue to be capable of being happy. They had sources of self-worth outside of money, social connections outside the office or hanging with their startup bros, and interests that are intrinsically satisfying even if they are not profitable.
You don't need all of the above, but you do need at least one. The ones who don't have any of the above will go to dark places.
Money will _absolutely_ buy happiness. Whoever tells you otherwise is fooling you.
Yet there seem to be many other things playing a role in happiness. Besides the famous ones like love, I can cite Ikegai, Wanderlust, Ubuntu, Hygge, Wabi-Sabi (...), and it may be foolish to concentrate on just one of them.
Money can alleviate hardship and stress, but happiness is more than absence of sadness, hardship, or stress.
Indeed: happiness seems to require a certain degree of introspection to realize other things, such as social status or Ikegai, are needed too - hence the (also) famous corollary "Ain't got enough money to pay me respect; Ain't no budget when I'm on the set; If I like it, then that's what I get, yeah"
My favorite philosopher indeed!
Other than mental health issues, 99% of the problems that might cause unhappiness can be solved with money (though money not be the only factor).
Problem: Your mother requires an expensive medical treatment to prevent her from dying.
Solution: $$$
Your mother being dead may cause sadness, but that's not from a problem because there is no solution to someone being dead. That type of sadness is a normal, human emotion. It's entirely different to feel sad because of unchangeable realities than because you don't have enough money to fix the thing that's making you sad.
Enough money can buy the health (up to a point) of yourself, your family, your friends, and even your acquaintances. It can give you the breathing room to develop meaningful connections, to go to therapy, to exercise.
You might not be happy with money, but it has the potential to solve all the problems that affect you directly, and affect everyone you know directly.
Cries in Europe :(
Is this universal?
If I had at least a several-million post-tax windfall, I think I'd buy a nice home and maybe a little beach house, put the rest in index funds, and spend my time being healthy, and building particular open source software and hardware.
(Building things without résumé keywords being a consideration; it's almost unimaginable, now.)