This is incredible! Though if someone wanted to live off $450,000 a year once you retire early, that comes to about $11M invested, so I also understand where the $10M goal comes from!
Great point! That math makes complete sense when the goal is full early retirement funded entirely by portfolio income. My personal number assumes traditional retirement, with a ~30% annual savings rate. Each person should surface their assumptions and do the math for their version of enough, rather than inheriting a default $10M goal without realizing why.
Thank you so much for sharing! We often think about the false equivalence of value (in the market) and value (one’s worth) and how it can distort decision-making in how we lead our lives
Another approach to this is to speak to people 10-15 years older than you and ask what their wants and needs are and then work towards that in the next 10-15 years.
thoughtfulness!!! love reading candid vulnerable honest reflections. such essays like this one move our culture forward. thanks for sharing your work.
in general i wish avg and median adults aimed for more ambition (andys.blog/ambition)
but then as you rightly point out, above-avg ambitious people have trouble toning it down and feeling satiated, oops!
i've come to $100k/yr roughly as the threshold for where i see my friends diverging significantly in work life balance, goals to have family or not, change the world, etc
i think that threshold represents a bare minimum for "abundance mindset" - a new kind of intellectual and moral "poverty line" in the modern era
these tradeoffs deserves a new term, which is why i created and am launching the zScore (https://andys.blog/zLevels) as a free open-source "product" today.
curious what folks interested in such topics think of it, and how we can best bring change to our culture
--
p.s. re: "how we drifted so far from a realistic number in the first place." - excellent question!
its the best explanation i've read of what inflation (and money) actually is, not a "reading assignment" more just a definition the USA needs to learn, one person at a time
wish this was assigned in 9th grade tbh so i dont have to keep sharing it hahahaha
The ideas in the article rhyme and echo with the principles you’d find in r/fatfire or the book “Die with Zero”. There’s likely some perfect balance that’s different for everyone between instant gratification and delayed gratification.
Timing is everything. I realized everything I want for the rest of my life comes in at $35M at the high, $15M at the low. This includes a small campground with some lodges on a lake, a house with an airplane hangar in the south, and small island for escaping if things go bad here in the States. Otherwise, I also landed at $450K per year on the low. A nice home and sending my kids to Alpha school, a month vacation and all the eyelash extensions and lasers I want. Not too shabby!
Who would have thought to put Bing Crosby and Trader Joe’s in conversation to make a point about wealth distributions in the Bay Area. Hats off to you 👨🍳
This is incredible! Though if someone wanted to live off $450,000 a year once you retire early, that comes to about $11M invested, so I also understand where the $10M goal comes from!
Great point! That math makes complete sense when the goal is full early retirement funded entirely by portfolio income. My personal number assumes traditional retirement, with a ~30% annual savings rate. Each person should surface their assumptions and do the math for their version of enough, rather than inheriting a default $10M goal without realizing why.
Curiously, the NPV for $450k per year, might actually put you in $10 million zone with conservative assumptions. What discount rates did you use?
“What could a banana even cost? Ten dollars?” I see what you did there. ;)
Thank you, thank you, we try :)
Bob Sutton, MS&E professor at Stanford, has this wonderful anecdote from Kurt Vonnegut
https://www.linkedin.com/pulse/kurt-vonnegut-joe-heller-how-think-like-mensch-rather-bob-sutton?utm_source=share&utm_medium=member_android&utm_campaign=share_via
Thank you so much for sharing! We often think about the false equivalence of value (in the market) and value (one’s worth) and how it can distort decision-making in how we lead our lives
I am unreasonably annoyed at the guy who said it was Sisyphus’ paycheck because that’s a great line I wish I had thought of.
I’ve always been chasing the $10M number, with mixed success. However this analysis has one problem which is that it’s a pretax #.
great stuff, as a 48 yr old finance bro it rings true.
Sisyphus’s paycheck? Insightful read.
As a fellow MBA student, this was a great read. Was cool to see what a lot of business students think about written on paper (or substack).
We love to find a fellow MBA in our midst! Thank you :)
Another approach to this is to speak to people 10-15 years older than you and ask what their wants and needs are and then work towards that in the next 10-15 years.
Yes, and ideally you trust these people not to themselves have distorted wants and needs
How happy do you think you would be on half this? I.e $5M portfolio value
thoughtfulness!!! love reading candid vulnerable honest reflections. such essays like this one move our culture forward. thanks for sharing your work.
in general i wish avg and median adults aimed for more ambition (andys.blog/ambition)
but then as you rightly point out, above-avg ambitious people have trouble toning it down and feeling satiated, oops!
i've come to $100k/yr roughly as the threshold for where i see my friends diverging significantly in work life balance, goals to have family or not, change the world, etc
i think that threshold represents a bare minimum for "abundance mindset" - a new kind of intellectual and moral "poverty line" in the modern era
these tradeoffs deserves a new term, which is why i created and am launching the zScore (https://andys.blog/zLevels) as a free open-source "product" today.
curious what folks interested in such topics think of it, and how we can best bring change to our culture
--
p.s. re: "how we drifted so far from a realistic number in the first place." - excellent question!
we were born into this... inflation since drifting off gold standard doesn't help and everyone (including our savior Zohran plz) should revisit 1974 - http://www.givemeliberty.50megs.com/An%20Economics%20Lesson.htm
Wow we love an Ayn Rand reading assignment in the comment section 🫡
Lool
its the best explanation i've read of what inflation (and money) actually is, not a "reading assignment" more just a definition the USA needs to learn, one person at a time
wish this was assigned in 9th grade tbh so i dont have to keep sharing it hahahaha
http://www.givemeliberty.50megs.com/An%20Economics%20Lesson.htm
Or just move to Chicago and buy a 2 bed condo for less than 200k, make a family and still have great jobs available without all the hassle.
ok agree, chicago is an absolute steal and I loved it when I lived there.
genuinely loved this
The ideas in the article rhyme and echo with the principles you’d find in r/fatfire or the book “Die with Zero”. There’s likely some perfect balance that’s different for everyone between instant gratification and delayed gratification.
Timing is everything. I realized everything I want for the rest of my life comes in at $35M at the high, $15M at the low. This includes a small campground with some lodges on a lake, a house with an airplane hangar in the south, and small island for escaping if things go bad here in the States. Otherwise, I also landed at $450K per year on the low. A nice home and sending my kids to Alpha school, a month vacation and all the eyelash extensions and lasers I want. Not too shabby!
Minor nit: Hillsborough (where Bing Crosby lived), not Hillsdale (where Trader Joe’s is). 8-)
Who would have thought to put Bing Crosby and Trader Joe’s in conversation to make a point about wealth distributions in the Bay Area. Hats off to you 👨🍳