25 Comments
User's avatar
Friends That Invest Pro's avatar

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!

Artificial Whimsy's avatar

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.

Daniel's avatar

Curiously, the NPV for $450k per year, might actually put you in $10 million zone with conservative assumptions. What discount rates did you use?

Joshua Plourde's avatar

“What could a banana even cost? Ten dollars?” I see what you did there. ;)

Artificial Whimsy's avatar

Thank you, thank you, we try :)

Artificial Whimsy's avatar

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

Peter Davies's avatar

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 #.

The Curious Mind's avatar

great stuff, as a 48 yr old finance bro it rings true.

2 Sense - Charles's avatar

Sisyphus’s paycheck? Insightful read.

Noah Kim's avatar

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).

Artificial Whimsy's avatar

We love to find a fellow MBA in our midst! Thank you :)

Pete Hancock's avatar

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.

Artificial Whimsy's avatar

Yes, and ideally you trust these people not to themselves have distorted wants and needs

Rai Sur's avatar

How happy do you think you would be on half this? I.e $5M portfolio value

Andy's avatar

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

Artificial Whimsy's avatar

Wow we love an Ayn Rand reading assignment in the comment section 🫡

Andy's avatar
May 13Edited

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

Brian N's avatar

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.

Artificial Whimsy's avatar

ok agree, chicago is an absolute steal and I loved it when I lived there.

Tara S's avatar

genuinely loved this

Basil Wong's avatar

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.

A.D. Besemer's avatar

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!

Hector's avatar

Minor nit: Hillsborough (where Bing Crosby lived), not Hillsdale (where Trader Joe’s is). 8-)

Artificial Whimsy's avatar

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 👨‍🍳