Road to financial independence?

[davelj]

Let’s flash forward and assume you’re 65 today just to make things simple. You could retire and live pretty comfortably if you had $750K in savings, and your house and car are paid off. You could invest $400K in high-yield fixed income at 8% and get $32K/year pre-tax, plus you’d get about $18K/year in social security. (You’d invest the other $350K for growth to keep up with inflation, which your fixed income won’t do.) So, you should have about $50K/year pre-tax, or about $3K/month after tax and you’d be on Medicare. You should be able to lead a reasonably comfortable life on that and keep up with inflation until you keel over. (Yeah, the math is rough, but it’s not too far off.)

So, you’ve got 23 years to get there. Adjusting for inflation – assuming 3%/year – you’ll need about $1.5 million in 2031 dollars plus you’ll need to buy and pay off a house in the meantime. You’re starting with nothing. Forgetting about the house, and using raw division (this is imperfect analysis, I know), you’ll need to save/achieve-through-investing an average of $65K/year for the next 23 years. Again, that doesn’t include the house you’ll want paid off.

Given the taxes and cost of living here in CA, slogging it out at a $100K/year job and saving a little bit each year isn’t going to get you even close. No, you need a plan of action.

My suggestions: (a) Marry someone wealthy, (b) Marry and divorce someone REALLY wealthy (no pre nup), (c) Inherit money, (d) Win the lottery, or (e) Pray harder for one of a-d.

[Anonymous]

As to dave’s scenario, it’s a good thing it doesn’t take much to make me happy. I can do very well off of roasted chicken, beans and rice.

[Anonymous]

As to dave’s scenario, it’s a good thing it doesn’t take much to make me happy. I can do very well off of roasted chicken, beans and rice.

[Anonymous]

As to dave’s scenario, it’s a good thing it doesn’t take much to make me happy. I can do very well off of roasted chicken, beans and rice.

[Anonymous]

As to dave’s scenario, it’s a good thing it doesn’t take much to make me happy. I can do very well off of roasted chicken, beans and rice.

[Anonymous]

As to dave’s scenario, it’s a good thing it doesn’t take much to make me happy. I can do very well off of roasted chicken, beans and rice.

[scaredyclassic]

work until you die. that’s my plan.

Drink Heavily.

[scaredyclassic]

work until you die. that’s my plan.

Drink Heavily.

[scaredyclassic]

work until you die. that’s my plan.

Drink Heavily.

[scaredyclassic]

work until you die. that’s my plan.

Drink Heavily.

[scaredyclassic]

work until you die. that’s my plan.

Drink Heavily.

[NotCranky]

Marion. A suggestion: Wait and buy a duplex or move somewhere where you can buy a duplex. You will probably have to sacrifice your dream home/dream neighborhood visions. Live there for a few years until you get the hang of being a landlord if you are not already expert at that. You stay there until you retire and you live mortgage free with enough income to pay for maintenance,taxes adn insurance, plus some necessities of living. Alternatively if things go well you get good cash flow after a couple of years you buy more or buy the dream home(with some work history behind you) with the security of being able to return to the duplex if things don’t work out great. If we get a boom,15 years from now, you sell or keep the stuff.
None of this would hinder your ability to do some of the things others are suggesting. In fact it will help. Buying a nice 2 story house, as you have described to be to your liking, could mess up your goals. Whether you buy an sfr or multi-unit definitely study buyer’s assistance programs.

[NotCranky]

Marion. A suggestion: Wait and buy a duplex or move somewhere where you can buy a duplex. You will probably have to sacrifice your dream home/dream neighborhood visions. Live there for a few years until you get the hang of being a landlord if you are not already expert at that. You stay there until you retire and you live mortgage free with enough income to pay for maintenance,taxes adn insurance, plus some necessities of living. Alternatively if things go well you get good cash flow after a couple of years you buy more or buy the dream home(with some work history behind you) with the security of being able to return to the duplex if things don’t work out great. If we get a boom,15 years from now, you sell or keep the stuff.
None of this would hinder your ability to do some of the things others are suggesting. In fact it will help. Buying a nice 2 story house, as you have described to be to your liking, could mess up your goals. Whether you buy an sfr or multi-unit definitely study buyer’s assistance programs.

[NotCranky]

Marion. A suggestion: Wait and buy a duplex or move somewhere where you can buy a duplex. You will probably have to sacrifice your dream home/dream neighborhood visions. Live there for a few years until you get the hang of being a landlord if you are not already expert at that. You stay there until you retire and you live mortgage free with enough income to pay for maintenance,taxes adn insurance, plus some necessities of living. Alternatively if things go well you get good cash flow after a couple of years you buy more or buy the dream home(with some work history behind you) with the security of being able to return to the duplex if things don’t work out great. If we get a boom,15 years from now, you sell or keep the stuff.
None of this would hinder your ability to do some of the things others are suggesting. In fact it will help. Buying a nice 2 story house, as you have described to be to your liking, could mess up your goals. Whether you buy an sfr or multi-unit definitely study buyer’s assistance programs.

[NotCranky]

Marion. A suggestion: Wait and buy a duplex or move somewhere where you can buy a duplex. You will probably have to sacrifice your dream home/dream neighborhood visions. Live there for a few years until you get the hang of being a landlord if you are not already expert at that. You stay there until you retire and you live mortgage free with enough income to pay for maintenance,taxes adn insurance, plus some necessities of living. Alternatively if things go well you get good cash flow after a couple of years you buy more or buy the dream home(with some work history behind you) with the security of being able to return to the duplex if things don’t work out great. If we get a boom,15 years from now, you sell or keep the stuff.
None of this would hinder your ability to do some of the things others are suggesting. In fact it will help. Buying a nice 2 story house, as you have described to be to your liking, could mess up your goals. Whether you buy an sfr or multi-unit definitely study buyer’s assistance programs.

[Author]

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