10 Million Dollars: The Ideal Net Worth Amount For Retirement?

Curious to know the ideal net worth for retirement? As someone fake retired in 2012 at age 34 with $3 million, let me tell you. $10 million sounds like the ideal amount of money to retire with.

I was talking to a tennis friend of mine who said his sister checked out once she cleared 10 million dollars. She was 37 when she decided to quit her job and go on an Eat, Pray, Love journey to Southeast Asia. She had made a bulk of her fortune as an early investor in an internet consumer company.

My friend and I then got to talking about other people we knew who checked out in their 30s and 40s. They too, had cleared over 10 million dollars in net worth or investable assets. They had all been early employees at successful startups. Or they had risen up the ranks at a big tech company while holding a lot of shares.

Even a 30-year-old softball buddy of mine who worked at Uber said he's shooting to have a $10 million net worth before he retires.

As a personal finance blogger, I subsequently got to thinking: Is 10 million dollars the ideal net worth amount for retirement? Is 10 million actually the new one million due to inflation? It seems to me that a net worth of $10 million or greater is ideal before leaving work behind.

$10 Million Is A Top One Percent Net Worth

10 million dollars is a lot of millions. If you have a 10 million dollar net worth or higher, you have a top one percent net worth in America. Therefore, if you can't retire off 10 million dollars comfortably, you've got some serious problems!

The sad part about wondering whether 10 million dollars is enough to retire comfortably is that plenty of people who make a lot of money still go broke. Just look at so many ex-NFL players who end up with very little soon after their careers are over. The reason why they end up broke is due to a lack of financial education.

Good financial education will compound on itself. It will pay dividends for years to come. One of the main reasons why I've consistently been publishing on Financial Samurai since 2009 is to help people reach financial freedom sooner. We've only got one life to live and schools aren’t willing to impart any personal finance wisdom.

For fun, because this is what personal finance enthusiasts do, let's discuss whether 10 million dollars is the ideal net worth for retirement. Of course, we can always retire with less. Most have. But where's the fun in that?

Retiring With 10 Million Dollars: The Ideal Net Worth

Intuitively, we know that retiring on 10 million dollars should be no problem. But let's look at the numbers.

The composition of the 10 million dollars is important. After all, you might have a 10 million dollar net worth, but six million of that may be tied up in your mega-mansion!

Ideally, you want your entire 10 million dollars to be invested in income-producing assets. Therefore, let's take a look at how much 10 million dollars can produce in this low interest rate environment.

Back in 2007, when the 10-year bond yield was at 5%, 10 million dollars could have generated $500,000 a year in risk-free passive income.

Living off $500,000 a year will provide for a very fine life. Of course, some households might still feel like they are scraping by. But not you!

You can live in a big fancy house, pay private school tuition, eat whatever you want, fly first class, and even fly private on occasion. You can also eat all the toro sashimi and Kobe beef you want. Yum!

Unfortunately, 10 million dollars today generates a lot less. Since the 10-year bond yield is around 3.4%, it can only generate ~$340,000 a year in risk-free income. Not bad, but no longer a top 1% income.

Although a decline in interest rates has helped support the U.S. economy by making borrowing costs cheaper, it has hurt the average retiree's ability to generate retirement income.

Therefore, even with 10 million dollars in investable assets, you've still got to pay careful attention to how your capital is allocated.

What is the minimum net worth amount to be considered rich?

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More Risk Required To Produce More Income And Wealth

$340,000 a year is a healthy amount of risk-free retirement income, especially if you don't have any debt. However, if there's more than one of you to support and if you have surprise costs, such as a big medical bill, perhaps it might not be enough.

What's the solution? Take more risk with your 10 million dollars by trying to earn a higher return. I don't recommend reaching too far for yield. Reaching for 4%-5% yields or returns is the most I'd go for. Remember, with 10 million dollars, you've already won the game! Further, with stock market valuations so high, returns could come down in the future.

Just imagine being all-in on dividend stocks before the March 2020 sell-off. You would be pooping bricks if your portfolio declined by $3.2 million in just one month! As a result, most multi-millionaires are highly diversified.

Sure, things are fantastic now. However, when you are retired, you should have no desire to create unnecessary heart attacks. Your goal is to live as long and as healthy a life as possible.

Here are some investment ideas that have the potential to generate higher yields with a reasonable amount of risk.

  • A REIT ETF like VNQ, which has a yield of ~2.7%
  • Investing in individual REITs like O, which has a yield of ~4.5%
  • Private eREITs, which have historically returned high single-digit yields, even during stock market sell-offs
  • Investing in individual dividend-paying stocks like AT&T with a forward yield of ~7%
  • Investing in a dividend ETF like VYM with a ~3% yield
  • Buying rental property
  • Lending out hard money (not a fan)
  • Buying an annuity (not a fan either)

By taking more risk, your 10 million dollars could conceivably generate $400,000 – $500,000 in retirement income. If so, you should be able to live well for the rest of your life.

The one thing I must caution is having a retirement withdrawal rate much higher than 2X the risk-free rate of return. As we've seen during previous periods where low interest rates stayed low for an extended period of time, asset bubbles can form and then burst.

Therefore, don't just assume your risk assets will always go up. They may, over a long enough period of time. But in the long run, you might also be dead.

Further, I'm assuming all of us with 10 million dollars would like to leave some money to charities and people we care about. Every person I know with $10 million wants to create a perpetual giving machine after they are gone. Having generational wealth also reduces your anxiety for your children’s future as well.

Ways To Make Your 10 Million Dollars Go Farther

If you don't want to take on more risk, the next best way to make your ten million dollars go farther is to lower your cost of living. Since you're no longer tied down to a job, you could relocate to the heartland of America to save on living costs.

Ten million dollars in New York City may be like having 30 million dollars in Des Moines. If you can bear the weather and the more homogeneous environment, off you go to Iowa! Besides, the weather in New York City isn't much better. But if you're coming from San Diego, LA, or SF, then moving to the MidWest may be more difficult.

See the minimum net worth levels required to feel wealthy in various cities. The biggest surprise is how high of a net worth is required to feel wealthy in low-cost cities such as Dallas, Houston, and Chicago. The other surprise is how much more financially satisfied residents are in expensive San Francisco.

Just the other day, I was playing tennis in 64 degree sunny weather while supposedly another Nor'easter was happening. It's during the winter months where California and Hawaii really outperform.

Once you've made your retirement fortune, it makes sense to geoarbitrage if you want to feel even richer. Some retirees have relocated to different countries like Mexico or Malaysia to save on living costs. Then again, if you have 10 million dollars, you probably don't have to go anywhere to save.

I strongly believe investing in 18-hour cities through a platform like CrowdStreet, which specializes in 18-hour cities, is a smart way to boost income and wealth. If you can generate 8% – 10% returns with $10 million, we're talking $800,000 – $1 million a year. Of course, there are no guarantees the greater you go on the risk curve.

More Ways To Stretch Your Money

Another way to get your 10 million dollars to last longer is to not touch it for longer. Instead of retiring before you're 60, wait until your 60s or later. This way, you allow your 10 million dollars to compound for longer and potentially grow even bigger.

The earliest you can receive Social Security is age 62. If you've been able to amass 10 million dollars in net worth or investable assets, you likely paid the maximum FICA tax for at least a decade.

Therefore, you should be able to also receive the maximum Social Security benefit a month of $2,324 if you collect at age 62 or $3,895 if you elect at age 70 for 2021.

Of course, if you retire with a pension on top of your 10 million dollars, then you should be set for life. If you have a pension, please count your lucky stars. Its value has gone way up with a decline in interest rates.

Earn Side Income In Retirement

By now, we should all agree that 10 million dollars is enough to retire well. However, I still suggest generating additional side income in retirement to ensure your capital will last for another generation. Earning side income also brings about a sense of purpose.

When I “retired” in 2012, I experienced some negatives of early retirement nobody talked about. Thanks to Financial Samurai, I've found something fun to keep me busy, especially during this damn pandemic. This site has helped with my mental health and happiness.

This site generates a decent amount of supplement retirement income. However, only one source of online income is passive: my severance negotiation book, which gets updated every couple of years. Writing articles, responding to business development inquires, and doing interviews takes time.

If you don't want to make supplemental income online, you can always do some freelance consulting, gig economy work, tutoring, or coaching. The opportunities are endless to make extra income.

Retiring Early With 10 Million Dollars With A Family

Now that we know 10 million dollars can generate between $250,000 – $500,000 a year risk-free without the help from Social Security, let's go through a budget. Let’s stay conservative and say 10 million dollars can generate $250,000 a year in relatively low-risk retirement income.

This $250,000 budget is for a household of four with two young children living in big city like Los Angeles. Both parents have decided to retire early in their 40s to take care of their children until they never come back.

The couple made their money working at six-figure jobs for 20+ years. During their careers, they averaged a 40% after-tax saving rate. They invested the majority of it in various investments that produce income.

Budget on living off $10 million investments - an ideal amount for retirement?

Budget Thoughts With $10 Million Of Investments

As you can see from the budget, $250,000 a year can go pretty quickly when you have two kids and a mortgage. Good thing their mortgage is only $500,000 on a $2,500,000 house.

If the couple paid off their mortgage, they would save $24,492 a year in cash flow. Having this extra breathing room would be nice because there's not that much extra to cut.

If the couple decides to send their two kids to private grade school, their costs will increase by $30,000 – $110,000 a year for 13 years. And when you have a net worth of 10 million or 10 million dollars in investable assets, you will likely want to send your kids to private school.

Once their kids are done with college, they will free up another $30,000 in cash flow by not having to contribute to two 529 plans. If saved properly, the two 529 plans should be able to pay for most of their children's college expenses.

Lest you think this $10 million / $250,000 budget is not based on reality, I've spoken to a handful of couples who have similar amounts of wealth and budgets.

In fact, my friend's sister who checked out at 37 with 10 million dollars has budgeted to spend $175,000 a year. She's focused on capital preservation after hitting it big. Here are some thoughts on what to do with $10 million if you so happen to have a nice windfall.

Retirement Will Be Different Than You Imagine

One of the great things about retirement is that you no longer need to save for retirement. Therefore, psychologically, your retirement income will go farther than you think.

For example, I saved 50% – 75% of my after tax-income from 1999 – 2012. Then I left the workplace for good in 2012. Once I left work behind, the income drop didn't feel so bad. I was only spending less than half of my income for 13 years anyway.

Everything was going great in retirement from 2012 – 2017. My wife joined me in retirement in 2015 when she negotiated a severance as well. We travelled the world for 10 weeks a year. Then we decided to start a family.

We decided to buy a larger house, a safer car, and save for our children's education. If our kids decide to go to college in 2036+, surely college tuition will be at least 100% higher.

As a result, the passive income that I thought was enough wasn't. Therefore, I had to figure out ways to make more. In fact, going back to work is definitely in the cards now that our kids are in school full-time and college costs continue to grow aggressively!

Don't expect your lifestyle and your expenses to stay static once you retire. You might have kids late like we did. Or, god forbid, you might get into an accident or have an expensive recurring health issue.

$10 Million Should Be Enough To Retire Happy And Free

If you've been able to accumulate $10 million, congratulations! You should be able to retire with little-to-no financial concerns. Go ahead and enjoy life to the maximum today. You're ahead of 98.5% of the American population. It’s not 99% because a top 1% net worth is now over $13 million as of 2024.

If you're still on your journey to financial independence, trying to accumulate a $10 million net worth or $10 million in investable assets is a worthwhile goal. Just know that even with so much money, you probably should continue to invest due to inflation.

With a top 1% net worth, I highly recommend you track your finances like a hawk with the free financial tool by Empower. I've been using it since 2012 and have seen my net worth skyrocket during this time.

Think about yourself as a mama bird sitting on a golden egg. The last thing you want is some vulture swiping away your baby. The more money you have, the more you have to lose. Therefore, diligently tracking your net worth, especially if you have 10 million dollars or more, is important.

Spend Your Wealth With Joy!

One last thing. Retiring with $10 million is still under the estate tax exemption limit of $13.6 million per person in 2024. Therefore, you can feel comfort knowing your heirs don't have to pay an onerous 40% death tax on capital you already paid taxes on. Further, you have plenty to donate more freely to charities you really care about.

I realize reaching a $10 million net worth or having $10 million in investable assets may sound like an unsurmountable goal. However, with so many investors making great fortunes from this bull market, maybe it's much more feasible than we think.

Now wasn't this retirement exercise fun? Good luck building your fortune! And if you just can't get your head around accumulating $10 million, then shoot for $5 million. It's amazing how much easier a challenge gets once you make a very big stretch goal.

How much is your net worth? (All assets minus all liabilities)

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Build Wealth Through Real Estate

Every person I know with a $10 million net worth or more is heavily invested in real estate. Real estate is my favorite way to achieving financial freedom. It is a tangible asset that is less volatile, provides utility, and generates income. High inflation also acts as a tailwind for rent and property prices.

Take a look at my two favorite real estate crowdfunding platforms. They are free to sign up and explore.

Fundrise: A way for all investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and manages over $3.4 billion for over 500,000 investors. For most people, investing in a diversified eREIT is the most appropriate way to go.

CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations and higher rental yields. They also have higher growth due to job growth and demographic trends. For those with a lot of capital, you can build your own select fund with CrowdStreet.

I've personally invested $954,000 in 18 commercial real estate projects across the heartland of America. My real estate investments account for roughly 50% of my current passive income of ~$300,000. Real estate is the ultimate inflation hedge, and will help you reach the ideal net worth.

Real Estate Crowdfunding Dashboard

Invest In Private Growth Companies

In addition, consider investing in private growth companies through a fund. Companies are staying private for longer, as a result, more gains are accruing to private company investors. Finding the next Google or Apple before going public can be a life-changing investment. 

One of the most interesting funds I'm allocating new capital toward is the Innovation Fund. The Innovation fund invests in:

  • Artificial Intelligence & Machine Learning
  • Modern Data Infrastructure
  • Development Operations (DevOps)
  • Financial Technology (FinTech)
  • Real Estate & Property Technology (PropTech)

Roughly 35% of the Innovation Fund is invested in artificial intelligence, which I'm extremely bullish about. In 20 years, I don't want my kids wondering why I didn't invest in AI or work in AI!

The investment minimum is also only $10. Most venture capital funds have a $250,000+ minimum. In addition, you can see what the Innovation Fund is holding before deciding to invest and how much. Traditional venture capital funds require capital commitment first and then hope the general partners will find great investments.

Track Your Wealth Wisely

The rich stay on top of their finances like a hawk. Therefore, do the same by signing up with Empower. It is a free online tool I've used since 2012 to help build wealth. Reaching the ideal net worth figure for retirement of $10 million requires diligent tracking.

Before Empower, I had to log into eight different systems to track 35 different accounts. Now I can just log to see how my stock accounts are doing. I can easily track my net worth and spending as well. 

Empower’s 401(k) Fee Analyzer tool is saving me over $1,700 a year in fees. Finally, there is a fantastic Retirement Planning Calculator to help you manage your financial future as well.

Personal Capital Retirement Planner Free Tool
Personal Capital's Free Retirement Planner

How To Become A Millionaire By 30 – My financial journey in my 20s.

How To Become A Millionaire By 20 – If you want to instill in your children a strong work ethic and make them financially independent sooner.

Your Wealth Is Mostly Due To Luck: Be Grateful! – You know it's true.

For more nuanced personal finance tips and advice, join 60,000+ others and subscribe to my free weekly newsletter. I've been helping people achieve financial freedom since 2009.

272 thoughts on “10 Million Dollars: The Ideal Net Worth Amount For Retirement?”

  1. Make it Boil

    I’ve made it! I’ve been working for some time to be able to post to this thread. Last week I joined the $10M net worth club. Sam, I wanted to thank you and the community you have created. At times, you’ve reaffirmed my thoughts, challenged my beliefs, exposed me to new financial concepts and revealed a glaring blind spot. Your writing style makes every concept accessible to people like myself without a formal financial background. I am very grateful for this community of like minded individuals looking to better their family’s financial situation. The site is largely absent of the vitriol typically found on sites. Again, thank-you and the best to you and your family in 2024!

  2. Depends how old you are. Both my wife and I are retired. We don’t need more than $100K to live well. Our SS income amounts to about $70K. Given that we only need $1-1.5m to create cash flow to do fine. $10 million is a nice goal worth pursuing but whether we reach it or not within the next couple of years is completely irrelevant. So it all depends old you are and what lifestyle you need to support.

      1. We both retired past SS full retirement age (66) and worked while collecting Social Security so it grew not only because of COLA but also because of contributions. Even in retirement we may fall again in the the 35% bracket due to large investment income (our RMD could add additional $120K), which is a curse because we don’t need it but have to pay taxes on it. Because of high Medicare and prescription surcharges we lose more than $13K upfront. We have moved our primary to Florida already so we won’t pay state taxes on SS and other income. That should save us about 10-15K in state taxes.

  3. liked most of sam’s ideas. think his living expense chart is to low. in reality most families have at least one child needing extra help. there are many items becoming much more expensive. in texas my home insurance on 750000 house is 6500 as an example.

  4. Charles Dart

    52 here, net worth (today lol) $11.2 million including house no mortgage. About half NW in cash T-bills averaging about 4.3% and overseas banks (my wife is non-American) averaging 8.1% this year (although I’m taking currency risk). Other NW half in big cap stocks/IRA/HSA/529s. Married with 4 kids ages 3-9. Passive interest and dividend cash income will be about $350k this year but expect that to go down 30% next year.

    We hit it big selling our small business 2 years ago. Haven’t been working since. Been quite frugal buying a home (bought far under what we could have, mixed feelings about that lol), new Hondas bought with cash no luxury cars. Decided to put all 4 kids thru private which will be a material commitment, $40-70k/yr depending.

    Haven’t been working, but starting to itch to do something productive again for fun and profit. Can’t even imagine getting a job again where a boss-man tells me what to do — unthinkable lol. Gotta get started putting some capital into income-producing real estate.

    I can’t shake the anxiety that $11 million won’t be enough to last us and give an inheritance for our children. Really gotta get more passive income going. Wouldn’t mind starting another business, but not sure up to the commitment with 4 young children.

  5. Hello,

    10 millions it’s good, but don’t forget than for the moment it’s a chance to United States, that there isn’t of “Wealth Tax” on your Patrimony, I saw recently maybe a day the UHNWI will pay this.

    It’s really different in Europe : France, Spain,…, Swiss, the “high patrimonies” pay the “Wealth Tax” who added at the “Incomes Tax” (idem concerning the succesions “inheritances”), it’s the double or triple penality.

    By example, in France for only 1,35 million dollars of patrimony, you must payed this “Wealth tax”.

    Hope than this tax don’t arrive never in your country.

    1. The first $12.06 million of your net worth / estate is tax free upon death PER PERSON. The threshold might go up or down over time. But it’s pretty darn high!

      I hear you on France though. But at least you guys have affordable healthcare and some happier!

      1. Thanks SAM for your reply.

        You’re right, no country or governance is perfect, they all have their flaws.

        I’m not against pay this tax and wish the sharing of wealth, but really since 10 years now, many wealth people have left the France and his arrogance, I plan to do it myself.

        Who knows maybe to join Monaco, the United States or others…

        Thanl you still for your interesting article.

      2. Robert Ruschak

        My investor clients want to achieve more than $10m, keep buying real estate investment properties and create unlimited happiness!!

  6. I’m 51 years old and my annual income from my job is about 150K. My net worth varies quite a bit because almost all of my money is in the market. A few lucky buys into some tech stocks over a decade ago, as well as the Fed’s irresponsible money printing, has done me well. Last November, NW was 17.5M, but after the recent market fall, it’s now a little over 13.5M.

    I’ve been frugal, saving, and investing since my teenage years and these habits have done me well, but I also feel like it turned into a mini penny-pinching scrooge. It is like a hard-to-break habit. Lots of financial books and sites are good at describing how to make/save/invest money and how to generate money from your assets. But there’s not a lot of info on how to do responsible/conscious spending or break out of the frugal mindset to enjoy what I’ve created.

  7. Interesting post – 10 million ouch. I will be 69 this year. unfortunately had to retire early because of a disability. Wife will retire next year – she will be 67. I do collect 24k in social security – wife will collect 44 k she will wait until age 70 but our assets (not including home) is 4.3 million all invested in stocks bonds and cash 40/50/10. Our expenses are about 100k a year.

    So we will need to draw 80k a year until wife reaches age 70 (3 years )

    Now to make the money last – glad the withdrawal rate is up

  8. CityConfused

    Hi folks, actively debating something and would love your POV. Just sold a company to FAANG, will be vesting over next two years. At current stock prices (big if), in two years, NW would be 5M in NYC or 5.7M in Miami. I’d be 31 then.

    I’m debating whether to move to Miami or NYC. If taxes were no object I’d do NYC. However, taxes are obviously an object and I’m not to keen to work at FAANG for another 2 years after.

    How should I think about this?

  9. Hello,

    Love this website. I am very grateful for what I have so there is no complaint whatsoever here. I simply want to get an opinion of my situation. I just turned 50; my wife and I have no kids. We roughy have a $6.5mm stock portfolio and a $10mm property portfolio (including my own residence of $3.7mm). Our mortgages all together are about $5mm.

    I have a job that pays me $1.2mm and I like my team and the day to day work. But it’s a large company and I hate the politics and direction it is going. I can stay for a few more years and retire. Or I can quit now and find something that may pay less but I have more enjoyment, adventurous and freedom.

    Our lifestyle is comfortable with a few luxury items once in a while. We certainly don’t need to fly private or have Gucci or Hermes everywhere. All the rental incomes roughly cover mortgages expenses and real estates taxes, so I can’t imagine I need to spend $300k pretax or $200k after tax a year.

    So if you were me, 1) stay in this comfortable job or 2) retire from the corporate life and do something fun.

    Many thanks,
    Daniel C

    1. Daniel… myself 54, similar financial position ans spending as you have. I jumped the ship 2 years ago, launched a small start up with and idea I had… work maybe 50% on it. Other than that…enjoy live more… I go skiing when there is fresh snow and sun etc,,
      Also recently lost my mother but I was able to spend a lot of time with her during her last month… invaluable.
      So my advise…leave the “comfortable” job behind… I haven not regretted a day “out of the office” yet.

    2. Be done with the stress and frustration of your current job. Freedom of time is real wealth. You are a productive hard working individual. Once you have some time to rest and recover you will be revitalized. Rediscover who you are; eat well, sleep well, exercise and learn. You will open a new chapter and, it may be the best most rewarding of your life. Andrew Carnegie believed that a man’s most powerful, productive decade was 50-60 years of age. You are 50, go for it!!


    I am a 39 year old, white male, married no kids, living in New York city. I have been in finance for 16 years working on an equities trading desk at an investment bank. I am thinking of quitting my job to try something new (either in Tech or Crypto)

    Between 2013-2019 I averaged $1 million per year in W2 income (pre-tax). I saved the vast majority. I purchased 3 properties + invested in a handful of startups and maxed out my 401k since 2006. I have a net worth of ~$10M after debt. Asset base is mostly real estate with low interest rate debt + multiple 401ks and private equity exposure. Our burn rate is about $180k per year (i feel like we live a very comfortable lifestyle)

    i have two side hustles: 1 real estate and 2 crypto. We have 3 homes (2 rentals + 1 primary). The two rentals generate about $400k in gross rental annually and $200-$250k after expenses.. I have been a crypto hobbiest since 2016. Have made decent money in the space (About $1M-$1.5M) but want to focus on it more.

    I have HATED my job for the past 6 years but stuck with it because it was paying so well. That recently changed.

    The last two years my W2 salary has dropped from $1M to $600k largely due to automation. After tax and including inflation, my W2 is down over 50% compared to 2017. However, the hours worked havent changed. I still work 60-70 hours per week doing something i hate and Im getting paid less than half what i used to make.

    Furthermore, my W2 as a percentage of net worth has dropped considerably. (after tax W2 / NI = 3-4%). Back in the day when i was just starting out, a $400k bonus (after tax) was life changing. At this stage in my life, that bonus of $200k makes less of an impact. Plus I am missing the boat in tech + crypto as that is just my side hustle.

    The last 3 years, my assets grew and real estate hustles have generated more than my full time job. The rental income along is 70-80% of my W2 income after adjusting for taxes.

    I have two options
    1) Stay in a job i hate making $250-300k after tax in an industry that is a melting ice cube and eventually get laid off in 2-3 years
    2) Take a 40-50% pay cut to roll the dice and enter the crypto space full time. Might not make money the first 1-3 years but long-term believer.

    My wife supports me leaving my W2 but demands i have something lined up before pulling the trigger. However, that is extremely difficult working 70 hours a week + multiple side hustles.

    What do you guys think is should do!??!

    Thanks in advance!

    I AM A HUGE FAN of this website and the COMMUNITY around it. Wishing everyone a happy and healthy new year!

      1. Thanks Sam! i already downloaded your book and read it. great advice. however, i think its going to be harder for me. The good news is, i would be leaving less money on the table if i leave bc defferred comp has gone down a lot.

        Thanks for the reply!

    1. Moneyfriend

      We’ve got a very similar path, except I love my job in trading. I can see myself staying for years, especially if I continue to make a few million a year. I quit when I was 33, thinking I’d get deeper into real estate and crypto, but realized I really missed working on something that I can actually add a lot of value and command respect. I returned after a 1 year break, admitting that it taught me a lot about how I’m not looking forward to retirement and being past my prime. However, I’d leave the second I ever say I hate the job.

      You have one life. Do not spend it doing something that you, in the presence of a community that you respect, say boldly that you “HATE”. Frankly, your wife is completely wrong here. It’s impossible to focus on the next step when you’re spending 70hr with your head underwater doing something you can’t stand. It’s different if you needed the money, but come on, your withdrawal rate is sub 2%, you’re clearly capable having had success in your career/RE/crypto, and, perhaps above all, you do not have kids.

      Good luck!

    2. You have many choices and you are still young. While I am 56, we have a net worth (investable assets) of over 10.2 million. Still working at a job I don’t mind toooo much. I keep on doing it so my assists can grow. They should grow about a million more in 3.5 years. Sure you are making less then you did, but are still making great money. I am very conservative now, sold all my rentals and company. If I get a return over 3 percent it works for me. Good luck

  11. I really love the content on your site! Thank you.

    One thing I don’t get – it seems that you’re leaving inflation (3%) out of the target yield calculation. For instance – yes, with $10M and 1.5% risk-free yield, you do get 150K a year, but after 20 years you’d need to spend $263K per year to maintain the same life style. You’d in fact need a 4.5% yield investment to balance out.

    Obviously, you know all of that – so what am I missing??

    1. If you had 10m in investable assets, you would just borrow 400K per year against that portfolio at approx 3%. Loans are not taxable, so you avoid income or cap gain tax and you let your portfolio continue to compound at 5%+

      There are other benefits as well, step up for estate etc.

      1. So when do you repay the $400K loan? Do you repay it each year? Then take out another $400K loan? Or do you not repay the loan each year and just let the loan balance grow? If you repay it each year, won’t you have to cash out of investments thus causing a possible taxable transaction?

        1. Hey Ramon, I’m currently doing almost exactly that. Home value ~$2.4M paid off, just took a $400k 30 yr mortgage at 2.99%. Wanted an easy monthly repay of ~$1,600 mo as I’m repaying with income (not gains) but wanted the mortgage benefits and some additional investable capital/dry powder.

          Not a retirement strategy yet but would repeat in retirement depending on rates for a tax free lump sum. You’re correct though that the repay will create a taxable event but it should be from long term gains or lower income tax levels. The interest rate is the key here.

  12. One thought is that as your “risk free” rate drops, the need to analyze expenses increases. At a 1.5% risk free rate, If you can cut 15k from the budget that is 1 million less needed. With less income needed there is also less tax impact, so it can snowball for you.

    These expenses don’t even need to impact your quality of life, refinancing, energy efficiency, solar, are all things that can reduce or eliminate after tax expenses.

  13. Bro I am 35 with all negative, unpaid cars, unpaid student loan, unpaid house. And some people complaining about only having few million at my age.

  14. I am getting rattled here reading all these articles. My husband and I have around 1 Million in all Vanguard funds and we are 72 years Old. We have to draw our first RMD this year. We have about 90K left in our mortgage. He is still working as a teacher and has only 12 years of service for retirement pension. I have 27 years of service as a teacher and will have pension. No Social security for both of us. You think we can survive with pension and our Retirement funds in Vanguard?

      1. You’re a financial samurai and you don’t know that many teachers cannot qualify for both a pension and SS?


      In your case, without SS and Pension, it will be difficult to have a decent life from the interest only IRA. You may have to draw down from the Principal to meet your expenses.

    2. Paul Dos Santos

      Easy to retire, assuming you are the “normal” educator, you also probably have a tax deferred employer program. If you teach in states like CT you not only don’t get SS but you can’t even qualify for 50% of the other spouse, although that won’t apply to you because you both teach… however YOU MAY HAVE YEARS OF ss CONTRIBUTION WHEN YOU WERE NOT A TEACHER AND THAT YOU CAN COLECT ALTHOUGH IT WILL PROBABLY GENERATE A REDUCTION IN PENSION.
      A million may not be what it used to be, but it is still a million, with proper financial planning it can be done and you can enjoy a very nice retirement.
      Listening to people here, you would think you have to be in the top 1% to be able to retire well, that is not at all true.

    3. My brother a teacher in the alum rock school district retired and cannot collect social security and a friend who was a teacher in Southern California also cannot collect social security

  15. Always enjoy you posts & especially the ensuing comments.

    Retired young in ’98 with a nice little mortgaged to the hilt real estate portfolio & foolishly just kept buying, rehabbing, flipping &/or holding.
    We have been debt free for many years & free & clear on a conservative $7-$9mil of mixed use properties & 1st position notes. Our Passive/K-1 income nets > $228k/yr & we still enjoy rehabbing the odd property.

    Other self directed investments taken purely for tax deferral are up there as well, but the dreaded RMD will soon kick in as will taking Soc Security.

    My wife has our kids heavily invested in Real Estate to the point where it literally covers the operating costs of their own homes that we built or rehabbed. In fact REI & W-2 income qualified our single 26 yr old daughter for a $650k home in Scottsdale AZ. Her passive income alone now covers >50% of the operating costs for that home.

  16. Most of you guys are just nuts. Sorry to say it but you just are. 10 or 20mil isn’t enough for some people? Come on. I’m 38 and I retired on a net worth of 6mill when I was 31. I have 2mill cash in my house I live in. 1 million in a couple rentals. Have 700k cash in the bank and rest in stocks that produce around 100k a year after tax in dividends. Based on all the calculation Ive done I can live a great life and never run out of money ever. In fact, I have too much money. If you think you need 10mill especially over the age of 50 you need to take a hard look at your spending habits.

    1. I don’t think many people are saying they need $10 million to retire. I think people are agreeing that $10 million to retire or more is an ideal net worth number.

      Do you have my wife and kids? Where do you live? And they’re pretty important factors when trying to figure out and target net worth.

    2. Shane, I’m with you. I live in California and bought my house 25 years ago. it is now worth $3.7M but I only pay $12K in property taxes because California limits the increase in property taxes and I paid off the mortgage. I also have $4.2M in liquid investments mostly in diversified ETFs. I am still working but generated $54K in dividend and interest in my taxable accounts and another 20K in tax free accounts in the past year. This does not include the $600K in increase in portfolio value from January of 2021 to today with what most investors would consider a relatively conservative portfolio of stock and bond ETFs. I also saved $600K because of a big payout from my job which was unusual as I normally don’t earn quite so much. Regardless, rather than spend the windfall, I am saving it. If you think about it in spending terms, if I spend $100K like Shane does a year, that is 6 years of retirement spending without touching the rest of the portfolio. If you want to be picky and include inflation, then it is still at least 5 years.

      That said, the advice on this site would have had me in 100% risk free bonds at 1.6% vs the $600K my portfolio increased off of a base of about $3million (for those following along I had a $3M starting point plus 600K savings plus 600K portfolio increase gets to $4.2M). Instead, living conservatively, no mortgage, no car payments, no child care assistance (which is a ridiculous expense the FS includes in his budget for two people not working), etc.

      Yes, I am taking more risk. But over a 10 year period, I am not really taking that much risk. So if I were to retire, I could easily live off of the $4.2M with a very, very nice lifestyle.

      Plus, the advice on this site doesn’t really deal with normal retirement post kids in college where there is no more saving for college education and people have paid off their mortgages. Plus, the FS budget for two retired people includes $19K for childcare assistance. Why do you need childcare assistance if both parents are retired! I mean, isn’t that part of the point of retiring early? You get to spend more time with your kids when it counts? OMG!

      Anyway, I live on much less and take much nicer vacations than the FS does. His priorities and mine are not at all aligned. For example, you can build a home gym with a Peloton and Bowflex weights for about $3K and then only pay $40 a month for the Peloton subscription as opposed to the $500/mth FS spends and never have to deal with the sweaty “bros” at the gym who spend 20 minutes hogging one machine. I just have to share with my wife.

      Bottom line is you are are right. The people on this site, FS included, can use to ratchet down their spending habits. Kids or no kids.

      1. “ That said, the advice on this site would have had me in 100% risk free bonds at 1.6% vs the $600K my portfolio increased off of a base of about $3million (for those following along I had a $3M starting point plus 600K savings plus 600K portfolio increase gets to $4.2M). ”

        Can you point out where I say this about your allocation? I wonder if there is a misunderstanding somewhere I need to correct.

        Here is a related post on my recommended proper asset allocation by age.

        Not sure how you know what my vacation spending amounts are. But I’m glad you are taking nice vacations. You can’t take it with you.

        A $7.9+ net worth is great. If you feel it’s enough, then that’s all that matters. Personally, I decided to accumulate more based on our spending habits. Our passive investment income is about $340,000 a year now, which is a comfortable amount for us but couldn’t be generated reliable with your liquid net worth.

        That’s the beauty of personal finance. Financial targets and spending amounts are personal.

  17. Clyde Benke

    I just topped 10 million with the recent surge of my NVDA stock. Pretty good for a guy without even a high school education. My median cost for the shares was $13.62 and yesterday they closed at $650.48. I’m 65 and never planned to make this much money, but the habits I developed just made it work. 25 years ago I stopped selling real estate (I bought my first house at 20 for 15K) to buy more and just used equity to finance new purchases. It made no sense to sell, when the prices mostly just kept mushrooming. I bought a 4 new properties at fire sale prices from 2009 to 2011. So now have 7 properties worth 6 million and 200K in rents coming in yearly. My stocks are worth 4.5 million and just keep climbing. It’s very true the first million is the hardest, but the next millions are much easier if you’re smart and know how to properly leverage. I still have one 500K mortgage on my primary residence, just for the deduction. My thought is most everyone has to work, you might as well make it pay well if you can!

    1. Clyde Benke

      One thing about …. RISK. You have to take it to make bank ! My real estate values were slashed in 2008 and my NVDA dropped by 1/2 in 2019. I did not panic or sell and just waited for the recovery. Risk is the price you have to pay for profit. Just be sure to manage it as well as you can ( NO over leveraging !) and try and do it while you are young to develop a tolerance.

      1. You are so right, I don’t ever plan on running out of money now, but I will for sure run out of time !

  18. Thought provoking article as usual, Sam. It seems like everyone has their own number in mind. I always thought $10M would be my number, but it appears for some people that’s not enough. I guess that is human nature though, isn’t it? When you actually reach a number, you look for a bigger number. Single digit millionaires aspire to be decamillionaires, centamillionaires aspire to be billionaires. Fascinating indeed to read actual wealthy people’s thought processes on the comments here. What struck me was the individual who had hit $10M, but still didn’t feel secure or like it was enough. I read somewhere that for the uber-rich, there’s always that fear that they will lose all their wealth somehow. Personally, I’m 46 and about to hit $3M net worth, but don’t feel exceptionally wealthy and that’s ok with me. After this pandemic, you realize that health, family, and friends (things money can’t really buy) are what’s most important. I’ll just go on watching YouTube videos of yachts, private jets, and supercars, and admiring them from afar.

    1. Clyde Benke

      Everybody wants what they can’t have. That is the biggest secret to understanding how life works ! For one thing, once you have it, you are no longer “wanting” it.

  19. Based on the survey, more than 28% of the readers have more than $10m, maybe $10m is an achievable goal? Not knowing the participants’ age, it is hard to tell what age group has achieved this level of wealth.

  20. 10 million is not enough for me. It used to be a goal and the thought was that this would be plenty. Well…it probably is. I’ve done the numbers – penciled out expenses; including extraordinary events. We aren’t big spenders (only recently flying first class – despite a million dollar income) and will most likely accumulate money as the years go by. We are 63 and a couple years from planned retirement. We are well above 10mil but I don’t know that I would be comfortable at 10 million. Homes are paid off, have not carried a credit card or car loan in 30yrs. The challenge is truly being secure in what you have. We are working on that. We both grew up with nothing and it’s hard to let go of that insecurity.

    1. I’m in your same boat just in our late 40’s. Because we have about $2M/year (and climbing thanks to inflation and expansion) in expected expenditures (as business/real estate owners), $10M+ NW just doesn’t feel like that much of a security blanket. It doesn’t help to know we still have to sustain ourselves (and teenage children) for years to come either.

      I think a lot of average earners should try to understand this rather than wondering why $10M isn’t automatically more than enough. I guess if we sell our business and real estate we wouldn’t have to worry about our expenses. But we would be giving up a 7 figure income by doing that. I still feel trapped and a bit apprehensive about whatever age we decide to retire. Of course there is the lingering concern about the possibility (and probably inevitability) of another Great DEPRESSION with an 80+% loss. Odd to feel this way but it’s my natural emotional inclination. Another lingering concern is that the family may never want to cut back on the level of spending we are currently used too – spouse has no interest in giving up that 7500 sq ft home even once we’re empty nesters, among other big expenditures – high end vacations, etc. Makes me wonder how I’ll transition from earning and amassing savings to retiring and drawing down those savings, even if it’s just a portion of the nest egg, with those concerns lingering regardless of what a financial advisor might say to reassure.

      Hard to feel like you won the game with our age and expense circumstances. I wonder how many other decamillionaires are in similar predicament and also feel this way.

      I guess we make two.

      1. I am 61 yrs old and have a net worth of about 14million. I am well off, but do not feel like i am rich. I live a modest life, and am thankful for what I have. Many of the people here sound like a bunch of pompous assholes whining that with 10 million or more they are at poverty level. For god’s sake, with that much money you are in the top 1% of Americans. Stop complaining.

    2. Lynn,

      Im 37 years old with 10M investable with a wife and 3 kids. We have no debt, but i truly believe the 20M mark is the golden number to achieve financial freedom.

  21. Like some other readers, I feel discouraged at the notion that I will need $10mm in order to retire really comfortably.

    Here’s my situation as a 48-year-old married gay man with no children:
    * Net worth of $2mm
    * $740,000 in cash
    * $750,000 at Vanguard Brokerage (80% Stock Funds / 20% Bond Funds)
    * $416,000 in SEP-IRA at Vanguard (80% Stock Funds / 20% Bond Fonds)
    * Manhattan Apt worth $800,000; $600,000 left on mortgage at 3.125% on 30-yr mortgage
    * Annual salary of $240,000 as a sole proprietor of a health care practice
    * Spouse makes $180,000 a year and provides us with health insurance

    I’m wondering if I should get braver with my cash position at this point in time and throw more of it into the Vanguard funds? Or should I pay down some of my mortgage?

  22. I know this post is motivating for some, but it also feels a bit of a downer.

    I am 35, single income, with a 2.5m net worth in 3 homes + retirement, and reading the comments and this post makes me feel way behind compared to the 30 year olds with 5m in net worth.

  23. Hi Sam
    Great article. Would love to hear your thoughts about inheritance expectations and retirement. Using the $10 million figure — let’s say you and your spouse expect to inherit a portfolio of real property currently valued around that figure. National life expectancy tables suggest the bequest at or around retirement age. Assume both working professionals in big east coast City with combined w2 & passive income of about 500k. Is living somewhat beyond your means now instead of deferring gratification (not maxing 401k, buying boat .etc) irresponsible considering the future prospects?

    1. What an amazing problem! As W2 employees, maxing 401ks+ backdoor Roth IRAs should only be about 50k, a 10% savings rate with your incomes. What if you just did this tax-advantaged part? That would definitely still let you buy a boat and not leave you entirely in the lurch should you be cut out of the will.

  24. Abe-alicious

    I’m 46, and my net worth is approximately 9m, and I am retired. My expenses, including a 1 year old and baby mother is around 90k, not including income tax. Honestly, I dont even think it’s that high.

    One thing people need to watch out for, especially when calculating their net worth, is their what their real LIQUIDATED net worth is. Especially in our very liquid real estate and investment environment, your net worth is NET of taxes and fees, not just assets less debt.

    For instance, I own 50% interest in a warehouse in austin, and my portion is probably worth 2.5m or so. But, really, my basis is 1.3 after depreciation, and if I sold I will incur cap gains and a 6% fee. So, really, it’s only worth 2m give or take. I can say my net worth is 9.5, but its 9. I can say my investments are 3m, but they’re 2.8. Etc etc…

    A lot of people have sizable investment accounts…you have to calculate your worth AFTER capital gains. If you have an expensive home, same thing! Reduce your home value by 6%, and if you made a ton on it, reduce it more.

    Many, many people look at their bank accounts and forget that there is the govt hand that reduces their net worth.

  25. I found this article quite interesting, as well as the comments. As someone who is 31, and admittedly off to a good start, my natural guess would have been that $10M is the # to shoot for at say, 55.

    My husband and I:
    – non investment income $325k
    – retirement savings $625 (60% Roth)
    – Investments (stocks, ETFs, mutual funds $450k)
    – Cash (yes, it needs to be invested, procrastination $140k)
    – Annual expenses all in ($70k)
    – own $425k house (outstanding principal $300k)
    – no other liabilities, live in Philadelphia

    Feel like the $10M is attainable as long as no major disruptions. Constantly debate whether a real estate investment other than the primary residence is a good idea. Also, wonder when life insurance comes in.

  26. 10mil my a$$. Im 40, if i had $200k, id be able to quit my job and live the next 30-40yrs EASILY. $200K dividend by 40 years is a healthy $5K a year to live off.

    1. Some people have finer tastes in life. Why $5K an year, I’ve seen millions of people live for < $100 /yr in some third world countries. Glad you are content with your 5K an year but dont expect everyone else to be content living a life like yours. BTW that 5k after 40 years in today's money be like having <2000$. That's the magic of inflation.

    2. Sorry Vinay, but you need to work on your math skills and get a reality check. Unless you live in a van down by the river….then I’d say you’re all good…

  27. curiousdreamerz

    I’m currently 50, with a wife and 2 kids living in the Seattle area. My wife and I both work in tech and currently have about 10.5M net worth, 7M in in the stock market and 3.5M in real estate with zero mortgages. My primary house is worth 2.5M and my second house is 1M which I rent out. So that is about 8M in investments that makes money for me as its invested and generates a return. However, my 2.5M primary house does not make me any money beyond appreciation as I live it. My goal is to reach about 10M in investible assets outside of primary residence. Depending on how the stock market does, I think it will take anywhere between 2 to 5 years. My networth at that point should be around 13-15M.

    1. Hi! Thanks for sharing. Would you be willing to share how much annually you are able to generate with your current investments in both the market and real estate? Are you primarily in mutual funds in the stock market?

      1. Currently, I’m not retired yet so I don’t really optimize for income generation and instead focus on appreciation. Checking personal capital, last year my total investments including primary and rental house appreciated about 16.4%. My rental property generates about 4% cash, but take into account property tax and insurance and repairs, its more like around 3%. I mainly invest in big ETFs like VOO, SPY, VWO, etc…nothing really outrageously risky. Annually, my wife and I pull in around 800K and we save about 360k per year after taxes.

        1. How can you possibly save 360k a year? Taxes must consume 300k. You have 2 kids. You have 2 houses. Something doesn’t compute here…

          1. Ummm. 800k-300k-360k is 140k/yr. His rental has positive cash flow. Financial Samurai is definitely on the spendier end of financial blogs (one of its real competitive edges), but many people live very well with two kids on $140k/yr spending money

  28. I will be receiving 10M in Three years at the age of 40 but wont be able to use the $ until age 55, how much will the account be worth at that time? Also, what is a realistic Rate of Return to expect? I have Three children ages 4,3 and 1. Will i have enough to retire at age 55? I forgot to mention that i can use the account for medical and education before age 55.

  29. Looks like there are 3% of the readers have accumulated net worth between $10M to $20M+.

    If you are in this category, would you like to share your story to inspire the rest of us to achieve the financial freedom?

    1. I started a Saas business 6 years ago. We cost disrupted a major category and now have about 100K shops using our software. My company is worth about 30 million USD and I own 95% of it.

      We’re just getting started, competitors of mine are valued at 9 and 10 figures.

      1. Yeah the secret to becoming a billionaire is hiring the right people (Which is very very challenging and requires a lot of luck especially in this day and age) and taking risk and watching your financial expenses so you can break even in a downturn and having a good product for the consumer.

    2. I’m 59 want to retire at 62. I want to spend $360k per year. What’s minimum amount I need in savings ?

  30. Ms.Conviviality

    I had a conversation with my brother this past weekend where he mentioned that $10M was discussed among some of his close friends as being the ideal retirement amount. My brother and his friends were tight in their 20’s while living in San Diego. My brother ended up moving to Orlando while his friends stayed in San Diego and started buying small companies, improving operations and balance sheets and selling for profit.

    They did so well that they all had net worths in the millions after a few years and eventually had to talk about how long they wanted to continue with their business. As partners, they made a pact to retire once they all reached a certain net worth. That amount was $10M.

    They retired 7 years ago in their early 30’s. One of those friends recently invited my brother to spend a week in Vegas with all expenses paid plus $5,000 gambling money. The friend spends his spare time trading options and nonchalantly mentioned losing $20,000 on one trade. Seems that $10M net worth is plenty for retirement and then some.

    1. Wow! How generous to provide $5000 in gambling money! It certainly seems like $10 million or more is the ideal net worth to retire early then.

      1. $5k can disappear in Vegas real quick over 5 days. Minimum nighttime tables are $25/hand and the seating is full, if you’re at craps you’re gonna have hundreds out there within a few rolls.

        Would we not also agree 5 days is too long? 1 night is not enough, 2 is good, 3+ is too many. It’s good to be young… :)

  31. Finance Shmoe

    Clearly, in any reasonable lifestyle cost scenario, and any reasonable scenario of investing down the fairway, $10 million will be more than enough to live forever on. Even using 3% as a “perpetual” withdrawal rate…and taking 35% away for taxes…that leaves one $195,000 of spending money a year. Probably 4X the average household income in the US. If someone is uncomfortable with 3%, they could go 2% and still have $130,000 to blow every year. Of course…the crazy edge cases won’t, like the guy who spends like Michael Jackson and “invests” his $10M in rare art. I’m at a number that has a very healthy excess from what I actually need to live to 120…and I’m only FINALLY retiring in a month or so (at 55), when I could have probably done so three years ago or so and been fine…so I’m in no position to judge anyone who says $10M is the right number, despite it being “too much” for anyone normal. :)

  32. Tanner M Barge

    $10 million does no work for me. I am 57 and I have a net worth of around $16 million in California but around $11 million is tied up in real estate: principal residence, vacation home, 4 unit apartment building. While all are paid for, the property taxes alone are nearly $80 annually. No chance I can retire without at least $10 million in liquid assets (non-real estate).

    1. I’ll offer a different perspective from CA. I’m nearly 50 with a smaller net worth than yours. Half of it is tied up in RE including my primary residence. My property taxes are higher than yours likely because I acquired my properties more recently. Everything I own has a big mortgage. My primary residence is < 10% of my net worth with everything else being investment properties.

      Unless some catastrophe befalls me, a $10M net worth is more than enough for my family of 4 with 2 young kids even though I have many more years of educational expenses to incur. With the expectation that my net worth will continue to grow, I'm already thinking about how I'm going to donate the money because my spending isn't keeping up with the increases in my net worth. I certainly wouldn't want it all to go to my kids should I pass away with a large estate; they need to have some incentive to create their own success.

    2. Your ROI on your Investments must be pretty bad if the 6 mil plus 4 unit cannot generate enough income to cover real estate tax plus your annual expenses. Of course, if your annual expenses are through the roof, that’s a different matter.

    3. Just my observation, but vacation homes are *terrible* investments. Say it’s a 1m vacation home you owned for 14 years. That actually cost you 4m (loss of compounding) + upkeep (taxes etc). This may be worth it, but I think about the opportunity cost everytime i (try to) make a large purchase.

  33. I always enjoy your newsletters that lead me to these articles. Your newsletters are worthy of publication on this site.

    $250K is very reasonable for a family of 4 in a high cost of living area. The details may differ, but gross income is correct. For example, my house is worth $2M and I have a $1M mortgage which takes out a big bite. Also jumbo mortgages have higher interest rates. Some people spend on private schools while others lease luxury cars or both. Also, I stopped contributing to my kids’ 529s when they were 9. I think I have enough but would love to see you write an article on that.

    While I have no problem with a $10M or any stretch goal, I’ve always been of the opinion that one can get a higher return than your “safe” benchmarks. If you’ve made it to early retirement, you should be a fairly good investor and you weren’t playing it safe your entire life. You took some reasonable risks.

    I think a diversified portfolio can easily return 5%/year, so a $5M in investable assets would suffice. There certainly would be more volatility, but I’m assuming we are all flexible and creative people to have gotten this far. Personally, I’ve been batting double digit returns since retirement (2013). Even if we had a few bad years in the future, I’d still be far above 5% annual returns.

    1. Money Ronin I think you are right on 5% being a very conservative target. I am a very conservative investor and the return on my portfolio is 8%. This return even held during the pandemic so I am confident that its a strong and diversified portfolio.

      I’m interested in hearing about what choices you made to get double digits returns.

      1. I agree that an 8% return is reasonable but I would be cautious using the pandemic as a bear market benchmark; just look at the S&P 500 for 2000 to 2010. I think in terms of decades for long-term investing. Over decades, I can beat Sam’s “safe” returns, but there certainly will be some bad years. I can ride out future bad years because I’ve had some extraordinary good years.

        As for my double digit returns, they were enhanced by my investments in real estate, specifically 6 to 12 unit C class apartments in a high demand/low supply area using ~70% leverage. I’ve been helped by rising rents over the last few years. If the asset value increases by 5%, my return is over 15% because of the leverage. On top of that I get a little cash flow and principal paydown of the mortgage which may add another 2 to 3% return.

  34. This family has $10 million and generating 250K on 2.5 percent growth. After that family is paying 18 percent tax. Why aren’t they paying off $500K mortgage at 2.75 percent.

    1. I believe they have budgeted 250k. They have likely made more from investments. Also it is a hypothetical.

  35. Who are you getting to sit for you for $15 hr? Generally I don’t see this budget working for you in NYC, altho’ I guess you save on landscaping what you pick up on the cost of parking. It would be very hard with kids unless you commit to public which right now is in total chaos.

  36. If I recall correctly, $5M was the number maybe a year or so ago. Did you adjust it based on the crazy stock market performance? When the bubble bursts, will it go down to $5M or lower?

    About the returns from the $10M, why not put aside 2-3 years of living expenses, and allocate the rest to 75% SPY, and 25% bond? Take a look at firecalc.com/. It provides simulations based on real market data and tells you how your assets will perform.


  37. Sam, this is a thought-provoking article. I think it is important to have stretch goals but the word “attainable” comes to mind. We don’t have a particular number but $10MM seems like way more than we would ever need. I guess it all goes back to your lifestyle and decisions down the road. We currently live in Colorado but do not foresee staying here in retirement. Geo-arbitrage is something we want to capitalize on for capital preservation. That said, I agree with you that you can’t just set your portfolio in a set-it and forget-it mode. We don’t have a $10MM portfolio but we keep an eye on it because we feel it is just the right thing to do. For us, every $ matters today and tomorrow. As far as options in today’s low-interest environment, we still max out tax-deferred accounts (401k, IRAs) but are pumping cash into real estate (through cheap leverage) and also pumping money into our brokerage accounts. The market seems to be overpriced and we might experience a correction down the road. For us, that would mean a buying opportunity knowing the market (long-term) goes up. This is a great article, not totally relatable but it is nice to hear perspectives and wonder about the possibilities :)

  38. Personally, I no longer use the US Treasury note as safe withdraw rate since the US government debt is getting so massive (and covid and related is making it much worse) it is no longer risk free. I still think using a 3-4% withdraw rate is a “safe” rate when you used a balance, diversified investment portfolio that should include real estate, large, mid and small cap stocks, international stocks, corporate bonds (both investment grade and close to it), and some government bonds. Between dividends/bond payments from these investments, should still be 2.5-3.5% yield range (higher if more RE rental property investment in SE or Midwest) plus appreciation – and actually have less risk than just US government bonds.

    The example family from LA – why on earth would you be saving $30k/year for your kids education when you yourself are strapped for cash and not saving for retirement yourself? Money for your kids college should always come after you are fully funding your retirement expenses. Plus, college has probably never had less value than it does today while simultaneously the highest costs in real terms its ever been. Financial Samurai alone is a PHD in personal finance and its just one site out of thousands on it that are completely free. Any topic you want has an unlimited amount of free knowledge on the internet – you just have to actually do the research.

  39. These comments put a lot into perspective. You have an individual living on $30k annually and another with an annual expense of $30k for a horse.

    Amazed at the monthly frugality on clothing expense, Sam! I guess nice clothing is one of my vices.

    With interest rates bottomed out, a rental property monthly income will be one of my goals for secure retirement cash flow.

    Somehow I considered $5M the threshold for retirement in the future, although inflation to me here in CA seems far higher than CPI documents.

    1. $5M is more than enough for me for retirement, but I have no intention of living in the super high cost of living cities in the US (SF, NYC, Chicago, Seattle, etc). You can buy a super nice large new house in the SE for less than $500k and have annual property tax between $2-6k. Cap rates for rentals are more like 6-9% too vs the 2-3% in the high cost cities, so much higher investment return opportunities as well.

      1. $5M is more than enough to retire even in most high cost of living cities. Perhaps exceptions are SF and Manhattan (but not all NYC). Chicago has some incredible deals on Gold Coast mansions 4000 sq ft for only $1.5M. When thinking of LA, everybody thinks about Santa Monica or Beverly Hills, but Long Beach is far cheaper with equal access to the beach.

        I think where most people go wrong in planning is they believe retirement is synonymous with no mortgage. That may be fine if you live somewhere with a $500K house (house = 10% of $5M net worth), but if your house costs more, you really should have a mortgage given the super low mortgage rates you can lock in for 30 years.

        Currently I have a $1M mortgage at 3.0% which I plan to never pay off (I refinance every few years). It makes no sense to have a large chunk of my net worth in my primary residence. I’d rather have the capital working for me. This is what I do (semi-retired), and I give the same advice to my retired mother-in-law. Her pension and small rental property cover her expenses. Why not take some of that home equity and grow her wealth for future generations or a charity? I’m a big believer in long-term planning which includes investing beyond one’s life span.

        1. I personally like having no mortgage as I sleep peacefully at night. I also don’t like a car payment. Of course, some may choose to invest their money and likely earn more than the 3% but there are fluctuations. Personal choice according to your investment philosophy and objectives.

  40. This website is really hilarious sometimes, I still can’t resist.
    I definitely have learned a lot in other articles here but holy smokes this article is out of touch with the vast majority of not just Americans, but people on this planet.

    For me I hope to stick things out another year or couple depending on how things open up with the pandemic, then baristaFIRE my way through life for as long as I feel like it (age 39 now). I have way too much travel and living to do. And it doesn’t take anywhere near $10million to do this. Highlights: spent a decade doing music full-time, travelled to ~60 countries including living out of the US for 2 1-year stints (once backpacking, once working on a cruise ship) and some longer-term medical volunteering, walked 8000 miles across the US and Nepal on long distance hikes. $12k a year will do me just fine, $20k a year makes me feel like a queen.

    1. What’s hilarious is you thinking anybody can live comfortably off $15-$20K/year. What’s hilarious is you thinking that you want to compare yourself to the average American who is not doing well healthwise and financially.

      What’s also funny is you think you can actually help other people and give to charity living off 15,000 to $20,000 a year. I like this article said, there are people who live for themselves, and there are people who also live to help others.

      Feel free to be selfish your entire life. But I can promise you you won’t feel fulfilled as the person who is constantly helping other people.

      When you are old and alone, you will have wished you had started a family or help more people who now want to help you.

      1. “What’s hilarious is you thinking anybody can live comfortably off $15-$20K/year.”
        I guess me and most of my friends are hilarious then? Millions of Americans- some who are struggling, but some doing just fine spending that amount? And billions of people on this planet?

        Also, I’d rather do for charity than give to charity. Each his own- if you feel better sending a check than being involved in the work itself, fine. My main work is in healthcare- I treated 11 low income patients today. I’m involved in community building. I’ve taught music in inner city schools.

        I’m writing just to challenge this idea you need $10 million which is very out of touch with where most Americans or people in general are at- you can be very fulfilled and not need anywhere near that much to live on. I imagine a lot of people read an article like this and feel isolated and hopeless. We both know the grey area is somewhere between living on $20k/yr, and $250k a year (which is a way conservative income off of $10mil in investments btw- 4% rule says 400k is reasonable to expect).

        Your comments about my personal life are unwarranted, but whatever, as I’m not getting married to you when the pandemic is over. My partner loves me just fine. I also don’t rely on having children to help me. I ride on my karma and my community building (and yeah, that does include my family- blood related or not).

        1. Life purpose, friends & family is true wealth. What someone “needs” to feel comfortable financially is infinitely personal. I respect people who take care of their own financial needs (because many do not) and those that provide for others. At different times in one’s life this dynamic may change. I appreciate Sam’s $10 million goal and protocol for getting there.

          I guess the point of this newsletter is to achieve financial freedom. So philosophical differences from the intent of this site, or disrespecting someone’s journey or belief system is counterproductive. Finances are deeply personal and everyone has their position. I’m glad Sam’s site encouraged readers to considering why they work, save and invest.

        2. I’m with Dizzy! Thank you, Dizzy.
          I am 69-year-old single parent with 25-yr-old disabled adult child (obviously had only child late!).
          I had most of my life “adventures” prior to initial parenting age 45. Travelled the world, etc.
          Never had professional career, but feel that I have done my best to provide for both of myself and adult disabled child.
          Some U.S. Citizens seem oblivious to truly living within their means.
          I have manipulated the “system” to best support my disabled child and I. But that does not require $10M in assets!
          I have followed this blog for many years while preparing for “retirement.” But have always felt out of sync with the predominant attitude.
          So many “affluent” U.S. citizens live in a world that seems like a fairyland.
          Sorry, but many months of pandemic isolation while trying to pursue medical care for the disabled within dysfunctional U.S. health care system has led me to this dismal view.

        3. Dizzy

          Keep up the good work!

          People who live in poverty need your kind of constant and personal interaction through volunteerism more than they need some one time grandiose Monetary donation!

          Pride and dignity in being considered a true and equal member of society is overall what the poor need not false pity and loathing for their existence!

          God Bless you for your outlook on life and willingness to challenge those who imagine they are the intellectual elite!

          Thank you for offering health services to the poorest in our community!

          Best Regards

      2. Bruce Lee suggested once that if everybody just helped the person on their right, no one will be left behind.
        You can take responsibility for yourself and reach your goals.
        It is good to help someone get on their feet, but to support them is to hurt them. Get a dream and work persistently towards it.
        The best help you can get is at the end of your own arm.

    2. I think that’s great and if you have no kids you probably can keep it very lean especially if you spend part of the year in countries where your dollar goes far. But your model is really no less surprising or extreme than SF. The vast majorities of people won’t retire w $10M, nor can they live successfully on $20k particularly as they age. I see a lot of elderly in my city who are clearly struggling financially and not a ton of support out there for them.

      1. Sam

        Good morning

        Following Post is in good jest!

        I just find it humorous when people talk about poverty as if there is a way to prevent it or that they can give more money to eliminate it. It’s more about certain personalities having power over others who are disadvantaged even amongst the equally poor than their income level that places them in that group.

        If you want your children to experience poverty you first have to dispel the notion that poverty is solely related to an annual income of less than $25,500.

        Poverty exist for the bottom 5% of Americans because they are the ones who are targeted by and suffer from the established evil (Machiavellians Narcissists , Sociopaths and if truly unfortunate Psychopaths) members of our society that have no regard or consciousness for their behavior.

        I would suggest surviving for a year versus a month with a family of 4 (My single mother had 6 kids) it shouldn’t be too difficult.

        Your children should attend a public school where they are the new poorest members. The Inner city schools are especially scary but really any public school will do (The wealthiest school I attended had the worst environment as supposed do-gooders are actually the most evil amongst us.)

        I found when it comes to those who work in the public sectors it did not matter what school you went to. It simply mattered whether there were any other members of the society that cared if you existed or not.

        There is a small percentage of people in all occupations like the following: law enforcement, teachers, principals, counselors, private business owners and anyone else who has to deal with the other 95% (That’s us) of society for whom are cared for by someone else who might retaliate against them for their evil actions.

        The bottom 5% are the only ones who can be openly abused and assaulted without regard for consequences. (Think George Floyd, but remove race from the discussion.) (And yes before an idiot has a chance to respond to the race issue, I (A white guy) have personally been physically manhandled/assaulted twice by white police officers for no violent actions on my part.)

        This is what poverty means and there is little that race has to do with it!

        You should strive to ensure that you live in the worst housing conditions you can afford and that you do not have reliable transportation to get a true meaning of being financially stressed on a daily basis.

        You do not have to factor much in for food: churches help, free lunch with a good dose of humiliation from school staff and fellow students, food stamps along with government subsidized supplements like 5lb cheese blocks (No wine with that for those of you keeping score.) will do wonders for your kids self esteem.

        Make sure you do not have access to a washer and dryer so you can budget in your 1/2 mile walk with quarters to the local laundry mat.

        Also factor in at least once a quarter some overpriced maintenance requirement by a contractor that you can’t afford so you can decide on gas for the car or gas for the heat in the trailer. But don’t fret much if your stove is electric your children can ferry boiling water to each other to mix in pitchers to take baths and being from Kentucky sleeping with your sisters to survive the ice box your in doesn’t sound so disgusting.

        Since you are a family of 4 I would suggest you negotiate all conversations! No one respects women especially single mothers and the wolves are always licking their chops at the prospects to include the children girls and boys.

        Words of wisdom save the money (you don’t have anyway) on toys and once a week to every ten days you can surprise your kids with a package of 99 cent generic cookies to share. (I am now 50 and the most excitement I get out of life is to buy a package of Oreo’s or Chips Ahoy’s and I smile for my mother every time.)

        Many of my friends were as poor as we were but they had other members of society (church community, sports and other activities clubs) looking out for them and therefore they could not be targeted by the evil people without potential discovery and retaliation.

        I personally find it patronizing and a little scary when I hear the people here talk about giving to the poor.

        My experience was that the givers were all “crazies” of some type or another hiding themselves from the respected part of society all the while using their generosity to hide their evil ambitions and intentions. (Jerry Sandusky comes to mind!) and his buddy good ole Joe!

        Personally I seldom give to anyone, it was degrading to be looked down upon as if I were a lesser human being! Something the giver never even realizes while they are patronizing their intended victims for their imagined deserved worship from others! (For the score keeper nuanced language.)

        There is one thing poor/poverty stricken people know better than anyone reading this site!

        They will survive until tomorrow morning.

        Seriously for everyone, life is brutal and we will all eventually decease to exist. Read the information people post and stop taking pot shots at each other. I can assure everyone positive experiences are better than negative ones and we all have Battle Scars even the Rich Girl who simply broke a nail to attain hers!

        Sam do not let your children experience poverty! Let them experience stealth compassion for others without glorified acknowledgement for themselves!


        1. OK, will do! Can you tell me about your experience with poverty? That’s a consistent hope from the comments section, for readers to share their personal experiences so we can all learn.

          I plan on writing the post. Thanks.

          1. Sam

            My families survival is ongoing, I personally made it out at least for now!

            Poverty induced trauma (Can be like PTSD on Steroids).

            One of my earliest memories (Age 6) is watching my dad give a lesson on life while he chopped three puppies in half. Our dog had 11 puppies and only 8 tits, it was simple country math!

            Parents divorced when I was 7 that Trauma event was particularly nasty! Better left for another day it ended with all of us in state home for two years and the Hollywood movies you watch are pretty close to how you are are treated and regarded. (Age 9-11)

            At 8 I got the privilege of helping to save my oldest brother aged 11 at the time from hanging himself by tying his shirt sleeve to a door knob and then over the top of the door. He was quite purple before we could get him off the door.

            That was a precursor to hanging himself four years later while in jail at the age of 15 seems the shirt works fine when jailers forget to do their rounds at night.

            Some of offenses for being put in jail the four months before his death were for being late to school and being out after curfew!
            Yes the school officials, judges and police were all supporters for him to spend time in jail instead of class. I would like to see how many parents on your reading list would even believe what I am writing? I know better than to have children, if you think you can protect them you are a fool! Do not worry, If you are wealthy and lazy parent your kids can get similar experiences at boarding schools!

            Even if you survive a month on $2,135.00, being a solid family unit you could never experience the daily trauma inflicted upon a poverty stricken mother from all parts of society to include all of the children and their society influenced behaviors.

            Poverty is not being poor it is about being the target of everything evil all at once and on an hourly basis!

            Thank God for the strength of good mothers!

            All men are evil, good men work hard everyday to not be!


            Cease to exist versus decease, no need to let the other team collect a point for intelligence bashing for those keeping score.

            Also the Clark download has gotten in my way a few times and canceled my post before submission.

            I never learned to type so it can take a while for me to put together a good post and redoing them means you lose some of my wit!

            By the way for anyone who thinks they are struggling and can not see their financial future getting where it needs to be. I will hit approximately 8-9 million counting government holdings for my pensions, military retirement and all other asset classes.

            Only in America is Poverty not an excuse all other cultures are designed to destroy individual achievements and to ensure the elites children do not have to contend with the more qualified poor!


          2. Sam

            Curiously enough I would like to know how serious you and other readers are about understanding poverty versus being financially disadvantaged!

            I think I could possibly write a short post each week for approximately 25-50 weeks if people are really interested in the nuanced differences.

            What are your thoughts!

            I can already see most of your readers are a little stunned by my candid posting about being a do gooder. (Thinking about how to get out of the new light shining on them.)

            Normally at least one evil doer will imagine themselves more intelligent and cunning than myself and attempt to show everyone else that they are by trying to make illogical discussion sound logical and truthful.

            “A Real Marine” initially had that thought for a second at least.”

            And yes I know I said we need to stop taking pot shots at each other but this guy really did jump into a cockfight with nerf balls.


            1. To all

              This might actually might be the quote of the century, so make sure you quote me properly and do not hijack it for yourself!

              “Jump into a cockfight with Nerf Balls.”

              Christopher Horn
              First Sergeant USMC Retired

              1. Sam,


                Thank you for the opportunity to share the ugly truth of our “So called society” (I forget wat country song that stems from but it is not intentional to omit a proper quotation for it).

                1st Story (Not the first in timeframe for what will come but the one that proves “All men are evil, a good man works hard everyday to not be!” (Christopher Horn at least I am not aware of this being quoted before but who knows!).

                So Poverty versus Poor:

                When I was (7) maybe (8) the youngest of six children of a single 27 year old mother. (That’s right she had six children before her 21st Birthday.), I was playing with several other kids from the neighborhood in the backyard of the largest house in our cul de sac. The Kids that lived there were approximately (7) and (5) (Honestly not positive but sincerely approximated.).

                They had an old refrigerator door in the back yard that we were pretending was the wrestling ring mat! (Maybe you remember “Jerry the King Lawler” and “Bill Dundee).

                So as we were wrestling I accidentally hurt the (5) year old somehow although not really sure how (Quite honestly he was a true sissy!). But anyway he ran inside his house crying and we had to stop wrestling and go home.

                No harm no foul!

                A few days later my oldest sister got what now as adults we can realize was a strange request from the older brother of the two boys.

                You see my sister had started smoking and these kids older brother aged 14-16 (estimated age) also smoked cigarettes.

                So they were on the phone and arranging the delivery of a cigarette to my sister, but it was only to be given if I specifically came down to get the cigarette, Not any of my other older four siblings could retrieve it.

                So I went to their house as my sister had been instructed to have me do by their older brother.

                When I got to the house to retrieve the cigarette it became apparent that it was a setup between the older brother and his (I believe Step Father!).

                So the older son blocked my path to return home while the father sent the two younger boys out of the house with angered instructions to beat me up.

                As I was being beaten by the two boys he kept yelling stuff about my families status versus his and how he wouldn’t stand for it.

                So I am there of course “crying” not so much from the beating as much as from the confusion of what has just occurred.

                The two boys are crying because they are confused from why their father is having them beat me and the older boy seems genuinely disgusted for his part in setting me up and preventing from escaping.

                It of course took me 20 years to reflect on this incident before deciphering the meaning of it and the realization of true evil.

                Please try to imagine a 35-40 year old man sitting in his home for 3-5 days conspiring a plan to hurt a 7/8 year old kid!

                Then orchestrating the plan to carry it out and then prodding his children to commit the assault.

                Now tell me if anyone reading this would imagine that any of their neighbors would commit this kind of act on their children simply knowing that they are to weak to retaliate.

                Single Mothers have no ability to guard their children against his kind of Socio/Psychopathic behavior!

                I find it hard to accept that anyone here would believe that their 7 year old child should be prepared or even capable to defend themselves against this kind of evil from the adult neighbors living on their own street.

                This is the reality between Poverty versus Poor!

                Stay tuned for next weeks example!


                1. To all,

                  I am not sure how this weekly post will pan out!

                  It seems it will be difficult to keep a running conversation for those of you who are intrigued/interested in the plight of poverty stricken America!

                  Although I can only assume that most of you will not respond with questions or opinions, it would be helpful for me to at least receive a response of acknowledgement that the post is being read.

                  These short stories are quite personal and if no one is even reading them or interested they should be discontinued!

                  Let me know if you believe they have ay value in solving America’s poverty problem?

                  The upcoming “Shitty Paint” story is actually pretty upsetting!


              2. Sam

                Here is a thought, I am not sure how to make the adjustment for your sites.

                Currently each topic is separated by itself!

                I would recommend that all reciprocal conversations be combined regardless of your monthly posting.

                Your viewers who are willing to engage in debatable/combative conversations are currently forced to have to revisit previous months articles of conversations to interact with you and your readers. I have to revert to past articles to continue heated debate versus moving to the future with each additional topic you discuss.

                If I am going to have a weekly topic of discussion about the reality of poverty in America it should be open to your current conversations and not tied to a topic from a month to a year ago. Your readers that are willing to engage each other in heated debate need an ongoing ability to antagonize eaach other for debate.

                I would suggest you discuss platform options for your readers responses to continue with each additional article you introduce!

                Just a thought!


              3. Sam

                Good Afternoon

                After three short post on Poverty Versus Poor, I have not seen any inquisitive responses from yourself or any of your readers.

                I fully understand and expected that they would not want to subject themselves to someone like myself (Virtuous Masochist are the most ferocious personality trait of all 23+ Currently identified personalities and it is still in debate as to whether it can be classified by itself.)

                Those who fall into the considered normal 16 personalities discussed in the Briggs Meyers evaluation have no idea of what goes through the minds of the the 7/8 other Sadist/Masochist personalities.

                If you fall into the normal 16 you are simply just a witness to the battlefield that is waged daily in your presence for which you are just a pawn used by the sadist (The Dark Triad) to obtain their individual objectives.

                Masochist intervene and endure the evil that will be extolled upon them, on a daily basis so that the 16 other personalities may survive their one off encounters with the Sadist!

                I personally hate the pain induced by combating the Sadistic personalities within in our societies but am compelled, capable and willing to go to war with all of them at every opportunity to ensure a just outcome for the unsuspecting target of their evil ambition and desires. Most people are blissfully unaware or incapable of defending themselves against these cunning and disgusting personalities.

                A lifetime of constant interaction with these demons of society allows one to develop a unique skill at defeating them on a regular basis.

                Investors by nature are people who want to purchase items for lower priced value and move the item to a more popular demanded location for personal profit!

                I do not think that they are as interested as you suggested in actually solving any of our countries problems especially the plight of the poor/poverty stricken.

                I will engage with another article and if there are questions or comments regarding the issue I will continue on.

                If the crowd is silent I will take my Q and leave the forum.

                It is personally rewarding to reflect on how societies leaders continue to destroy the pride and dignity of their fellow citizens and discuss the possibility of reversing that trend!


                1. Clyde Benke

                  Not everyone can escape poverty, because it’s on them to do so themselves and they just don’t have the drive it takes or even will try. But the truth is there are multiple paths in the USA for ANYONE to make financial progress. In most of the world there is no path at all and that’s why crossing our border is such a goal, for much of the entire planet.

                2. Clyde Benke

                  I would really be interested in finding out more regarding the 23+ Currently identified personalities?

      2. Bruce Lee suggested once that if everybody just helped the person on their right, no one will be left behind.
        You can take responsibility for yourself and reach your goals.
        It is good to help someone get on their feet, but to support them is to hurt them. Get a dream and work persistently towards it.
        The best help you can get is at the end of your own arm.

    3. I’m with Dizzy. I have one of the better salary jobs in the United States as an airline captain and thinking about ten million for retirement is just silly and completely unrealistic. Perhaps I’m no longer the audience for this blog.

      1. Honestly, you may not be, and that’s Ok. I’m a dreamer and always have been. I’m also surrounded by similar people who often fail, but often end up doing pretty big things.

        When dreaming is free, I say why not. You just never know.

        1. Financial Samurai, I love that you’ve challenged us to dream. I was happy with a $6 Million target and now you’ve made me think… why limit myself?

          At the end of the day though my family is perfectly happy living on a budget of $120,000 in the great state of Texas. Our home is fully paid for. We made a decision to downsize to one vehicle because we’re both working from home due to pandemic. Can we buy more? Sure we can. But financial freedom makes us both extremely happy – I invest for the challenge.

          It tickles me pink because I am an admin and I know I have a net worth higher than most of my co-workers and neighbors. I choose to work to stay connected to society and it gives structure to my day and sets a good example for my son. It also allows me to be very generous.

          My spouse and I are both 45 and started the investing journey when we were 23. You are an inspiration to us Financial Samurai!

          1. Awesome. Just don’t let me let you feel unhappy for not achieving your $6 million target! That’s the last thing I want, and it seems some readers take it this way with words to describe my post like, “dreams crushed, impossible, etc.”

            I just have a funny way of thinking I guess… I never see big goals as a bummer b/c I see people achieve big goals all the time. It’s motivating! Positive sum game!

            Great job investing for 22 years so far and enjoying the journey!

    4. Clyde Benke

      It’s easy to travel cheap when you are young, I did then too. But now I’m 65 not so nice. That lay flat bed in business class for 12 hours to Asia is worth every penny. You will find this out also, soon enough.

  41. Sam

    Good Morning

    Great provoking article!


    I find this to be the appropriate number to shoot for, for your Above Average Readers.

    The other 99% of those who have not found your site yet should shoot for a goal of between $2-$5 million if they want to sustain a future average lifestyle.

    Miami Boy, thank you for your contribution to the discussion it is the best example of understanding the reality of achieving wealth and the impact inflation has on your having achieved a supposed magical number.

    Tony, Veterans are not special Americans, military service was our choice and honorable members of the service do not demand or request appreciation from anyone for that service. (Semper Fidelis!)

    To all,

    The post here are great and quite educational for me, I have enjoyed all of the input!

    No one should be discouraged by this discussion, the goal of these conversations is to provide a forum where we all can benefit from each other’s perspectives and experiences.



    1. Chris,

      Tony did not demand a thing for himself. But I guess we should expect that from a Marine (not always known for their intelligence) He did not ask for anything. I’m pretty sure that guy is totally self made and has earned it all. He said “just some advice”. When did they allow snowflakes in the Marines? Hell, even Sam agreed with him.

      1. Kevin

        Read my post under VA Nurse it was intended for you.

        You might actually be right about my intelligence level as somehow I posted my response in the wrong forum.

        I still give my response a point over yours for its content!

        What military branch does your intelligence come from?

        Semper Fidelis!


    2. Chris,

      Thank you for your post. I was simply responding to his post. Isn’t that what you yourself mentioned “that no one should be discouraged by this discussion” that is what I was doing. Riddle me this? How can you complain when family is worth 10 million w/paid of real estate worth 5 million and can spend 80K the a year for private school? What major inflation has happened in the last 10 years other than probably real estate? Recently lumber has because of the Wild fires and pandemic. If I was a Little hard on. Junior (Miami Boy) I apologize to him. But please explain how they should be “recently feeling tight”
      Maybe their spending habits on that kind of net worthwhile?


      1. Tony

        Good Afternoon

        Thank you for the response and further discussion.

        I can not explain why it can be as challenging for a wealthy family to cope with unfortunate events and circumstances as it is for those in poverty.

        What I can say is that it is the reality!

        An acquaintance of mine, had the unfortunate experience of having her parents commit suicide due to a loss of established wealth and status.

        We should be mindful of the frailties of the mind when someone else seems to be irrationally affected by what we perceive as normal life’s ups and downs.

        Congratulations on your business success I love it when an individual can take on the world and come out on top.

        Keep it up!


        1. Chris,

          Sorry to hear of your friends loss of parents. Very tragic. In my view Miami Boy was complaining over stuff that was nothing for the type of wealth his family have or precedes to have I should say. Paid off house worth 2 million/other paid off real estate worth 5 million/500K liquid. Business that generates 1 million and cash flows 250K. Paid off land as well? If hurting with those numbers maybe time to liquidate some stuff and not complain. Surely people who can generate those numbers have a plan A, B, C and D backup modes. You know “Pull the Ripcord scenario”. In my observation he is entitled and has no concept of struggles in life that so many are feeling now w/low income or Little sources to assist. Because I plan ahead for all actions, I have been able to help all tenants that need it. I am waiving all rents as long as they prove unemployment (no back rents due). Donate to food banks etc, etc.. paid for a few new roofs for people, have went to local electric company paid off 10K of outstanding charges (In the undercover Stealth Wealth mode). When I donate I don’t seek or want attention. 10 million net worth he says they have is nothing to complain about when so many millions with far far less is just wrong in my observation.


          1. Tony

            Good morning

            I just did not see his comment as complaining.

            It seems to me he was just providing a real life picture of what can happen even if you have money.


            1. Chris,

              Look at the end of Miami Boys post where he said “It’s been quite tough for my parents lately.” If that not complaining I don’t know what is? I’m sure so many people would gladly trade places w/his family. Or am I wrong?

              1. The point of the post was that inflation is real issue. My parents business has done roughly 250k a year for roughly 15-20 years. 250k a year was worth a lot more 15-20 years ago than 400k is today. My parents had much less in terms of net worth 15-20 years. They felt more comfortable at the time than they do now. See below for inflation by various consumer goods and services.


                We are extremely blessed and privileged. 10 million is a lot of money. But I do feel that the money needs to continue to grow at a reasonable rate above CPI in order to provide the same standard of living in the future.

                Another thing – 400k in a corporate job is much different than as a self employed business owner. My parents have to pay health insurance (2k a month for our family of five because of specific health conditions) and they don’t have a 401k plan with matching or pension plan as many corporate jobs provide.

                1. It’s great you’ve been working through these aspects of your parents’ finances…I wasn’t nearly as aware or interested at your age, but of course there wasn’t the internet at the time. You’ll be ahead of the curve for your own financial journey.

                  Education, medical and housing have absolutely gone through the roof, and every generation coming up has it worse than the previous in terms of cost.

                  I disagree with the corporate job vs self-employed business owner comment. The benefit of corporate jobs is stability of income (assuming company/management is stable). But a huge benefit of self-employment is flexibility with deductions (home office, meals and entertainment, transportation) etc. Typically, everyone’s net income is far below a comparable W-2 Gross income. You can deduct health insurance (2K is cheap for a family of 5 btw) and a solo 401K allows you to max out contributions at $58K vs. $19.5K; (plus the ease of doing backdoor Roths).

                  At least your family has hedged inflation through real estate. The cash flow is the issue; a 3% cap rate on fully paid real estate is quite low, even for a HCOL area and Miami is not NYC or SFO. They’re benefiting from the appreciation but not the cash, so things “feel” tight.

              2. James

                Seriously, that sounds like a complaint to you?

                It sounds like a son taking his parents concerns to heart, to me.

          2. Tony

            Good Morning

            I should clarify, this person was an acquaintance of mine!

            The word friend is not something I use lightly.

            My wife and 8 men are all I have ever called friend and I have only communicated possibly twice a year with 3 of them over the past 10 years and have not spoken with the other 5 in the last 10-20 years(Not even sure if they are alive.).

            “All Men are evil, a good man works hard everyday to not be!”

            I do appreciate your sincerity of conversation.


      2. A Real Marine


        Sorry but tony did not seek or ask for anything for his service in his posts. He never said veterans are special. So are you saying those great Americans who have served and all who gave the ultimate sacrifice are not special? Wow, guess we can call you Commie Chris! Unbelievable. I think you must be one of the wannabees who never had the balls to join or tried and washed out because of bone spurs. How many participation trophy’s do you have in your room?

        A real Marine

        1. Real Marines wouldn’t suggest that other Marines did not earn the title!

          Closet Communist typically use projection to hide in plain sight!

          Hope your friends and family aren’t invited to this discussion!

          For the record and other readers:

          I am a retired First Sergeant and my highest position held was as the Acting SgtMaj of an Artillery Battalion (700+Marines).

          First Sergeant of a Division level Headquarters Company (1200+ Marines).

          First Sergeant of a Regional Headquarters in Central Europe for 16 countries.

          I served in theater during two wars in1991 and 2005.

          I have since served a year in Kabul, Afghanistan 2016-2017 and in Erbil, Iraq 2019-2020 (And yes the Iranian missile attack was quite close).

          I have been regrettably responsible for assigning deployment missions to two Marines who were posthumously awarded the Bronze Star for Valor!

          I still stand behind my statement, we are not special Americans we are simply Americans who have sacrificed more than others by our own choosing to do so. If others want to honor us we should be gracious about it but in no way should we shame others for not serving.

          Semper Fidelis!

  42. Curious why a fixed index annuity might not be a decent ‘safe harbor’ for a small portion (10 – 20%) of this money over the next ten years with interest rates where they are currently at.

    1. It works. What is the annuity rate?

      There are no right and wrong solutions, given everyone is in a different situation. I would say there are optimal and suboptimal solutions though.

  43. This post starts with a fundamental misconception that before retirement you are growing assets and after retirement you are drawing down assets; hence the 4% rule. I think of “retirement” as retiring from W2 or 1099 income; that is, trading time for money at a set rate.
    After you “retire” you should continue to grow your assets. Assets should primarily be invested in passive entities that grow in value and/or income. Examples are stocks, real estate, or (family) businesses (not bonds or gold). Our apartments are growing in value and income monthly.
    Asset management for growth should be done with your heirs. As Sam suggests passing money and wisdom (managing money, growing assets, enjoying life, glorifying God) to your heirs is a key motivator to most people. Don’t just give money. Give your knowledge, experience, and teaching to your heirs.

    1. I totally agree. I semi-retired in 2013 with “just enough”. My goal was to supplement my passive income with a side hustle. If I could get a 5% ROI, draw down 2%, I’m still 3% ahead. The part-time side hustle would help keep my nest egg invested.

      As it turns out, my net worth has grown faster since I retired than before. A big part of it is real estate. Although I’m not expecting double digit returns forever, I do plan to invest aggressively indefinitely. At this point, I’m investing like my time horizon is forever because I am doing multi-generational planning. I’m comfortable with an aggressive strategy because:
      1. I can earn side income if things go that bad.
      2. If I’m too lazy to work, I’ll still die with a positive but small net worth. Sorry, kids.
      3. If I’m right, I will have created intergenerational wealth.
      4. In either case, my knowledge and experience is worth more to my kids than an inheritance.
      5. I will likely get a modest inheritance in a few years which I do not include in my net worth at the moment

  44. I plan to retire at 60. That’s when I can get my pension of about 40k/year plus medical. I hope to have 3 million or more. I am 42 with a net worth of 1.5 million currently. Would love to retire now, but I would need about 6 million to feel comfortable and withdraw 2% a year. The biggest stressor to early retirement for me would be medical coverage. Even if you could obtain a subsidy, there’s no guarantee that it won’t be changed to some kind of means test in the future.

    1. It’s great you are getting a $40K/year pension! That’s like having $1,600,000 at a 2.5% rate of return.

      Let’s hope health care coverage gets more affordable some how. We pay $2,250/month for a family of 4.

    2. Kevin

      Interesting tirade!

      Obviously you are unable to decipher nuanced language!

      I would love to entertain everyone here by taking your bait.

      However, a ten page assessment of a personality disorder that screams for attention would take more of my time than you are worthy of.

      Tony being self made is admirable!

      Miami boy simply used personal experience showing all of us that wealth in retirement can be subjective based on actual future needs and desires.

      His parents appear to be squeezed based off of their previously established lifestyle due to significant increases in cost for the the things that are important to them after retirement.

      Stating legitimate facts and concerns in this forum is not “whining” it is educational!


    3. VA nurse


      I am also hoping to retire at 60 with a similar plan as yours but you are far ahead of where I was at 42! (Unless I count the government holdings for military retirement in my personal net worth portfolio.)

      Best of luck and thank you for your service taking care of our military members and their families!


  45. First of all really enjoy the article and the substance behind it. An observation though on various passive income opportunities. With $10m nest egg and $250k budget, why not simply employ basic index investing (60% Total Stock Index, 15% Total Int’l Index, 25% Total Bond Index). The Dividend in 1.8% (180k). $250k drawdown (2.5% Wd rate) should theoretically last forever and still leave generational wealth for charity and heirs. Basic Indexing (Bogleheads) say anything 3.25% pretty much is bulletproof. Why not keep it simple?

    1. Definitely possible. Depends on you risk tolerance. Such a portfolio construction would have declined by 25% or so in March 2020. Losing $2.5 million on paper in one month would be deemed too risky by others, including myself.

      Wealth and risk tolerance generally isn’t linear, since our expenses and tastes generally don’t grow linearly as well.

      Many could easily construct a $1-$3 million portfolio as you suggest. However, it’s much harder over $5 million IMO.

      What is your investment portfolio size?

  46. “Just imagine being all-in on dividend stocks before the March 2020 sell-off. You would be pooping bricks if your portfolio declined by $3.2 million in just one month!”

    I’m not a multimillionaire nor am I retired, but I’m all in on dividend stocks and was popping bricks at the time. Bricks of joy.

    A major market dip meant more of an investment opportunity for me, and for my dividend reinvestment to go farther. Only a couple companies cut their dividends; the rest increased or kept the same. And anyone with $10 million in the market should know that the market increases over time and that they shouldn’t worry about dips, whether they last weeks or years. That goes triple for dividend investors, for whom the portfolio value should be a mostly irrelevant number.

    My dividend portfolio at the time went from $192,000 to $129,000 almost overnight. I was overjoyed at the discounts the market was offering. Now it’s at almost $220,000. This would mean something to me if I measured the value of the portfolio by its balance rather than by its annual dividend income. Instead, I’m just gonna sit back and revel at my 20% YOY dividend increase.

    ARB—Angry Retail Banker

    1. I am glad you were pumped when your portfolio crashed. But I’m confident you’ll feel differently once you accumulate enough carpet all that produces enough income so you never have to work again. You will focus on capital preservation more.

      What are your thoughts on why you’d rather invest in dividends stocks versus growth stocks at your age and capital amount?

    2. This post has a good point. Sure a drop like March makes you feel awful, but unless you think the world is coming to and end, everything always comes back up if you were diversified to start.

      If you panic and sell, then you lose.

  47. Good stuff, Sam; everyone wins at any age with a positive attitude toward work and sound investment. These qualities are true for any culture, but it’s in the U.S. that we’ve best rewarded opportunity and risk – while systemically sustaining excessive levels of inequality. I’d add this: continuing to exercise throughout life is crucial for enjoying life at any age. Living off passive income is a great goal as long as you’re happy living!

  48. Parents are in their mid/early 50s in Miami and are feeling kind of tight.

    2 million house (Fully paid – bought for 500k in late 90s).
    500k Liquid securities/Cash.
    1 million business (cash flow 250k).
    1.5 million land (non cash flowing- fully paid)
    5 million fully paid real estate (cap rate 3% – 150k. Note: Cap rate doesn’t include CAPEX, which can be random non recurring expenses of 50k in a random year).

    Property taxes on the house have increased to 40k annually, plus maintenance of the house is around another 35k annually for flood insurance, HOA, light, water, gardening, random maintenance issues, etc.

    All the wealthy New Yorkers/northeastern have driven up the cost of living here. Miami isn’t the same anymore. I have two much younger siblings who attend private school that costs 40k(!) each! The same private school only costed me 15k when I attended 15 years ago. Combined with additional savings for college, its been quite tough for my parents recently, even with a net worth of 10 million.

    1. Here’s a plan. If feeling tight, then they should adjust living expenses. Or would that be an insult for Biff and Babbs? They are doing way better than so many people now. Who put a gun to their heads to spend 80K a year for private school for your siblings? Do they need some cheese w/all that wine? Your family really need a reality check. They control their destiny.

      1. Tony, Do you see how much in taxes this family is paying and how much their paying each year to stimulate the economy. That money disproportionately benefits the poor far more than the rich. Keep in mind, most private schools charge 50 percent of students enough to support the other 50 percent of students who otherwise can’t afford to attend. Rather than condemnation perhaps thanks should be in order.

        1. Bill,

          Very tough with a net worth of 10 million? Ever think where a good amount of your taxes go? While so many in this country and world are hurting? I have roughly the same net worth as his parents. All self made through paid for real estate and a business I started and grew. I come from a lower to middle class background. I’m sorry they are starving and eating off the dollar menu. Public school product and a veteran. Like many on this site I did not have a silver spoon. While nothing is wrong w/coming from a wealthy family. Just remember the sacrifice s and ULTIMATE sacrifices given from our brave men and women that allow us to live free and grow wealth. If you have served in the military and combat I thank you for your service as well Bill. If not please go back in your house and I will tell you when it is all safe for you to come outside so you can continue to count your money. Just some advice from a Veteran w/a few 12 month tours in Iraq and a successful business owner.

          George Orwell-

          People sleep peacefully at night only because rough men stand ready to do violence on their behalf.

      2. Salty much? Miami public schools are very dangerous and the money is going towards education, not wine and cheese (neither of my parents drink btw). How are my parents living large?

        1. Lol…you are so privileged and sheltered you don’t even get the joke about the cheese and wine. Wow!!! No use in even continuing the discussion after your reply about the joke was all I needed to know! Too dang funny. Good luck!

    2. The property tax is 2% of the value of the property. What’s the problem with that? I pay 1.5% on a house worth 350k.
      The maintenance is 1.75%. What’s the problem with that? I budget around 1.5% for my little house.
      The tuition is 0.8% of their net worth. What’s the problem with that? I paid $40k for two kids, and our net worth isn’t even 1/10th of theirs.
      And you blame wealthy New Yorkers while your family is worth 10 million.

      1. Tony (Public school) 3

        Miami Boy/Bill 0

        Looks like a clean sheet/shutout for the public school dude

    3. Perhaps you can give back to your parents financially to help them out? What’s their budget?

      With little debt and good cash flow from business and real estate, it seems they can cover their expenses no problem.

    4. Lmao…How does Tony’s salt taste Junior…hahaha! If I were your parents I would ask for their money back from your private school.

    5. Have your parents ask for a refund for not teaching you common sense or basic math. They might want to pull your siblings from that over rated expensive private school. (Miami Boy well you got the boy part correct). You really need to wake up. Your family do not deserve that kind of wealth, but hey it’s not illegal to be wealthy, clueless, shallow and dumb yet!

      Biff and Babbs.. now that was funny! Reminds you of the clueless Wealthy family in Wedding Crashers.

    6. It’s safe to say that when you’re privileged that you have to really carefully word any discussions on money, but this is a good post simply for its honesty and learning opportunity. Everyone on this board pretty much as first world problems so it’s all relative depending on who’s talking/judging.

      This presents as more of a cash flow issue rather than net worth. The pressure comes from maintaining a upper-middle class lifestyle in a HCOL area: having an expensive home (due to taxes and maintenance) AND putting 3 children through expensive private schools, with college looming, on what appears to be $400K, excluding any gains from stocks. Throw in cars, car insurance, some vacations for family of 5, etc. this is a huge nut.

      It’s great that the parents are honest with their expenses and income — could be that they want you and your siblings to be aware of the cost and the sacrifices they made for you guys. Especially when there’s a lot of classmates in private schools that are living much larger than you guys; it’s easy to lose perspective.

    7. They should likely diversify out of that non-income producing land if they need more cash income (although I’m surprised $350k annual income with no mortgage with no state income tax makes them feel tight) and they can get much better cap rates on rentals in other parts of the Southeast and in the midwest – up to 2.5-3x that fairly easily.

      1. Absolutely!

        If they’re “pinched’ on income the parents should do a 1031 exchange ASAP into income-producing real estate rather than just continuing to hold raw land.

  49. In order to reach $10m before age 50, it seems that you’d need to hit a startup/large equity upside. Or your own business that generates very good cash flow?

    Especially in the current low rate environment, I suspect a better outcome to $10m effective could be had with a $5m target and then earning $200k income per annum to account for the other $5m of value?

    But it doesn’t hurt to aim for high figures if you’re enjoying it. Just don’t be miserable chasing a start up and then earning less than a decent income. Start ups aren’t predictable, and you could end up with no net worth and no earnings. I think you wrote about someone like that previously?

  50. Interesting article…but you’ve just slammed the retirement door in a lot of people’s faces. If $1million seemed insurmountable, $10million will be impossible.

    I appreciate the suggestions on how to use your $10 million, once you’ve got it. I do. They’re good. BUT —

    You can retire cheerfully on a lot less. We are proof of this. Husband has now been retired for 5 1/2 years; I still do some work for myself, but am slowing down. And we live well on less than $30,000 a year. (A pension and both drawing Social Security.) We could draw down two annuities…but why do it, when we don’t need the money?

    Our money isn’t $10 million. It isn’t even a million. But thanks to careful living for many years (which we continue to do) and careful planning, it should be more than enough to get us through. Now why would I want to keep working for mere numbers — when I don’t need to? The freedom to do and go where I want is worth far more than $175,000 a year. Life is short — and it’s not all about money all the time.

    1. I’m glad you guys are enjoying a good life. That’s what matters at the end of the day.

      I certainly don’t think running the numbers on $10 million before retiring slams the door on anybody’s face. Instead, it may give younger people a net worth to shoot for or a framework about thinking about various net worth goals they have.

      I know I handful of people in their 20s were all shooting for $10 million net worths. This post helps share the how and why.

      1. I really don’t understand the worry w 10 million. Why a 2 to 4% return. Get the books out and find the return for Apple the last 5 years. This return is not going to disappear over the next 5 years. But if you want to be safe invest 3 million instead of the ten. You are not going to lose all 3 million over the next 5 years. Apple Pays a dividend. Buffet has a fortune in Apple and he knows more than I ever will.
        In my mind 3 million should grow $450,000 a year. But what do I know?
        I do know my investment statements say my rate of return for 2020 was 69% and I am not that smart. Buy I am smart enough to believe Apple will appreciate 20% each year for the next 5 years. If I am wrong, I still have 7 million and that is a boat full of money. If I am right …

        1. Congratulations to you Charles. Perhaps some people don’t have the same amount of risk tolerance or belief they can get 15% returns a year?

          My question to you is, why not spend more of your money on life at 72 years old? You keep saying you have lots of money, in this case, at least $7 million without 20% compound returns from one stock, why not just spend more of it?

  51. 60% of your readers (based on 29,000 votes which is pretty healthy sample size) have net worth of less than $1mil. Apparently 50% of Americans have minimal savings. $10mil is an impossible goal for 99% of people. But is it good to have aspirations and goals like these? This will most likely lead to frustration, unhappiness and regret. Many waste their youth pursuing money as a principal goal in life. Being 50, I can tell you that one commodity you can not buy with money is quality time of being young. The experiences that you can have at 30 are of higher quality and intensity than at 50. Many physical pursuits become impossible at later years (climbing high Himalaya for example). Why pursue the $10 mil goal, FIRE etc and waste your best years doing it??? Live your life to the fullest (with balance) while you can as you do not know how many years you have left and what quality of life you’re going to have in your later years. Sure, an old rich man can have a beautiful young girlfriend that will love him for his personality (hahahaha) but the sex will never be the same as when you are 25, no matter how much cash you have and how many blue pills you buy…

    1. I am 71. You are absolutely right. From 30 to 45 I spent all of my money on family vacations. Very happy I did. My family has wonderful memories. Now I take my grandson on vacations with my wife. Hawaii is his favorite.
      Now that I am old I realize I could have spent my money on fun when I was young or saved it to pay for an MRI when I am old.

    2. He just continues to write these articles to stir the pot. Don’t feed into it. Because I’m unable to think differently or think bigger, it upsets me and other people. Therefore, it is wrong.

    3. “quality time of being young”. Yes. It is one of the reasons why I left work in 2012 at age 34. We went to climb the stairs of Santorini.. or at least partially since we also got the donkey.

      I will never regret enjoying my youth, and neither will others!

  52. $10MM does sound like an insurmountable goal. I can’t imagine what I would do with that kind of money. I saw a lot of mrBeast Youtube videos titled “I gave someone $1MM and he spent it all” and all I could think was WTF!!! It would take me like 50 years to spend $1MM and someone spent it all in a day, WOW.

    Who knows, maybe one day I’ll get there but it’s more likely than not that I won’t. And I am content with that.

  53. Heh, my dad asked if I’m worth $10 million. No, I’m not even halfway there. $10 million is very difficult to reach, IMO.
    I think $10 million is a great amount for early retirement. If you can swing it and know how to invest. But less is okay too if you live moderately.
    If you can’t retire comfortably with a $10 million net worth, you have a spending problem. Keep working.

  54. Nice article. To me, net worth is a nice figure to toss around, but it’s really the cash flow from your net worth that matters. To the author’s point, if your primary residence makes up 50% of your net worth ($5M for example), a $10M net worth isn’t all that impressive (relatively speaking).

    For my family of 4, I’m targeting a gross cash flow of $30k/month from investments that will allow me to leave my principal investment amount alone and live off the cash flow. Hitting your cash flow goals is the metric you need to hit to be “wealthy” in retirement.

      1. All of my capital is “invested” in one form or another to try and get a decent enough return to hit my monthly cash flow goal. I’m definitely way too conservative in my investments but I really don’t feel like I need to take any large risks at this point.

        Excluding my personal residence, about 75% of my net worth is invested in real estate (specifically cash flow focused apartment buildings). About 15% of my net worth are in index-based funds and a dozen or so high-dividend (aristocrat 100) stocks. And I hold about a 10% cash position that is basically losing money in the bank with paltry interest rates.

        However, given that I am going to be stopping work and taking a “sabbatical” (aka retirement, but I don’t want to use that word) and with so large of my net worth in the apartment rentals that may be impacted by the rental moratorium, I’m hedging with a large cash position just in case. Worst case, when the next downtown occurs and Cash is King, I’ll be ready to sweep in and get some great deals in real estate.

  55. $10m nowhere near enough for me. Need $400k a year to live comfortably with some margin, and $10m feels like it’s not enough. $20m sounds about right and that excludes personal residences. That seems like a lot but if you have 2 nice homes (50k property tax alone; maybe $100k total), your wife owns a horse (30k for boarding, shows, vet bills etc), you still help out the kids (30k), take 2-3 luxury vacations (75k), drive nice cars, dine out a lot etc it all adds up. Don’t want to give anything up but the horse (wife would leave me), so i keep working. Not complaining either. Life’s good.

    1. Sounds good to me. Keep hustling! After all, you can gift over $23 million between two people to your heirs tax free.

      How old are you now and how far away do you have to go to get to your $20 million mark?

    2. You can take 2-3 luxury vacations for a lot less than 75k a year. We take 3-4 a year and never drop more than $20k, sometimes less. We are have a list of places to visit and are flexible to order and time of year so we can get biz class seats to europe or asia for $2k, Carib for $800 biz, etc and frequently free with miles. 2 nice homes taxes are $50k? Might want to consider relocating. I live in a 4,400 sq ft fully renovated home with a large pool and hot tub in a top 5 growing city in a top 25 MSA with half acre of land and my property taxes are $5,400/yr (@$630k city appraisal – worth ~725k today).

      I think you could chop half your expenses off just by moving out of the NE or SF and a bit more time researching vacations IMO (not to mention cut other taxes as well). Is staying in those areas really worth the extra $150-$200k/year for that kind of lifestyle? I can go visit those cities for free with miles anytime I want and have enough hotel points/etc usually paying nothing for lodging. I get to NYC, etc for work all the time and have no desire to live there. Visiting is fine.

  56. For decades, I’ve had a target retirement amount between 2 – 10 million dollars. If I hit the upper range, near 10 million, I would likely give much of the income away. I’ll never be a jet and mansion type of guy.

  57. Christine Minasian

    Once again Sam…you did it!!! You have amazing articles/facts!
    Most of your budget is accurate. Vacations for sure too low with 2/3 kids. Insurance too low on property/cars/life. Wait until your kids are teenagers- insurance goes up a lot!
    My husband just retired at 55 after starting/selling a business after 30+ years. He worked his butt off and walked away with more than you are recommending- we are going to live on the passive income and try not touching the principal for a long time so we can leave some to our kids. To some readers’ points…you don’t need $10M to live a good life and it’s a great reminder that only 1% of people can reach that. I love the readers’ comment about Wall Street Crooks- so true. We did hire a reputable investment firm and decided to pay the 1% mgmt fees. We are knowledgeable thanks to you but afraid to make long term investing mistakes. We went with Charles Schwab based on your last article. Thanks again for ALL your hard work Sam!!!!

    1. Congratulations! To be clear, I’m not recommending everyone shoot for a $10 million net worth before retirement. I’m just going through the numbers and wondering why $10 million could be the magical number or a lot of ones really motivated people check out.

      A 1% percent management fee on $10 million is a lot. But if your manager is making you sleep better at night and providing these in returns, if not performing various industries, then great.

    2. You should be able to get mgmt company for 0.25-0.5% with that kind of money. $100k to manage $10m is very high.

  58. Sam,

    Two areas of investment that I wanted to comment on that give a great risk adjusted return are hard money loans and owning unleveraged, income producing, commercial real estate. Commercial real estate such as apartment buildings and retail will generate about a 5 to 6% cashflow on your capital investment after paying a management company to deal with the headaches. These investments typically appreciate with inflation as cashflow increases with inflation in most cases–commercial leases typically have a 3% escalation in the rent every year.

    With Hard Money loans you should only be investing in loans where you are better off if the borrower defaults. This means your IRR will go up after default interest is collected. It also means the collateral is worth far more than the amount you lend, so you have no concern if the borrower walks away.

    With Hard Money loans I get between 8 and 12% on fractional loans that invest in on Fund that Flip, and about 12% plus points on loans that I originate myself.

    In my observation of many wealthy people I know, owning income producing hard assets or lending against them is a common way they invest and preserve their wealth on a multigenerational basis. They are very comfortable living off the cashflow that these investments generate. And the unlevered real estate tends to provide an excellent inflation hedge and tax shelter( from depreciation).

    1. With Hard Money loans I get between 8 and 12% on fractional loans that invest in on Fund that Flip, and about 12% plus points on loans that I originate myself.

      Any resources to get started with this?

    2. Can you elaborate more on how someone’s returns will go up in a hard money lending situation when there is a default? If you can’t get your money back, there are no returns to be had.

      I do believe in commercial real estate though. I think there are so many opportunities now that will make people a lot of money over the next five years.

      1. Sam,

        In the loan documents you have a default interest rate of 24% typically. If the loan goes into default that interest rate kicks in. You only lend up to about 70% of value( ie..you lend 700K on a property conservatively valued at $1,000,000). So if the borrower walks away your equity will be safe if the property has to go to foreclosure. You can also get an enforceable confession of judgement clause in the loan documents in many states that allows for an expedited takeover of the property.

        All legal fees that you have incurred to foreclose accrue and will add to the balance you collect at foreclosure. Again, if you lend in a state where confession of judgement clauses are enforceable this process is much faster and much less costly.

        I’ve never lost out on a dollar of interest or principal on a loan that I have made. Nor have I seen any friends who do 1st lien loans lose money over the years. The key is to be conservative in your underwriting on the front end…only lend at a level where you would be happy to own the property if the borrower walks away.

          1. The loans I originate are usually via referrals from real estate lawyers or real estate developers that I know. But to be honest, I’m happy to do zero work and get a little lower return by investing in many of the loans on Fund That Flip. Their underwriting and appraisals have been pretty good.
            You just need to make sure the borrower has a lot of “Skin in the game” on the day of closing and that the construction risk is limited–simple construction or none at all.

      2. Sam,

        This article provides more details on how loans are typically made:

        By Gordon L. Gerson, Esq.
        Only one type loan transcends every time period in recorded history, every region of the world, and every economic cycle: The “hard money” loan.
        The non-institutional hard money commercial lending market has once again reincarnated itself. In some respects today’s private hard money loans remain remarkably similar to your father’s hard money loans; yet new millennium hard money lending also requires an increased level of sophisticated scrutiny of some issues.
        Today’s hard money loan has become for many, the bridge loan or equity substitute of choice among developers in California and other parts of the United States. Though interest rates are at a historic low, hard money lending is on the rise. There may well be a correlation between the development and marketing by institutional lenders of mezzanine and equity products, and the rapidly rising entrepreneurial interest in the simple, privately placed hard money loan.
        The following is prototypical of today’s hard money real estate-secured loan:
        • The lender is an individual, owner/developer/investor in real property, savvy and well-networked.
        • The borrower is an experienced developer, will pay almost any price, to quickly close on a property targeted for development or re-development, and is strategy driven.
        • Loan amounts commonly range from $500,000 to $5,000,000.
        • Interest rates range from 8% to 18%.
        • Points range from 5 to 15.
        • Philosophy is always “Loan to Own”.
        • Equity Kickers only if no one else will make the loan.
        The resurgence of the hard money loan in commercial real estate lending exists for several reasons. First, institutional mezzanine lenders and equity sources sometimes have requirements that make conduit lending appear to be elementary sand box financing; and while institutional mezzanine loans or equity programs may be well designed for fundings that exceed the appetite of a private individual lender, they are otherwise oftentimes a documental strangulation and economically egregious. Secondly, private hard money loans are being made by high-net worth individuals who are highly liquid, and realize they can achieve a higher rate of return as investors in loans rather than testing their successful track records as real estate investors against historically low cap rates, overpriced markets, or markets where commercial recoveries are not moving fast enough. Thirdly, a good private hard money loan can be fast and profitable to both the private lender and private borrower.
        The speed in which hard money loans are made can be literally within days. Underwriting is often simply limited to how well the experienced investor relying on his/her own history as a developer, understands the marketplace in which the property
        is located, and is able to determine exit strategies should it ultimately own the property.
        It should be obvious why the hard money loan is profitable to the private lender. But it is also profitable to the borrower for several reasons. Since it may be obtained quickly, a borrower may quickly close on a sale of property. In a fast appreciating market such as the Southern California multifamily market, what a borrower may sacrifice at the closing table is offset by the benefit of immediate appreciation, or a shorter timeline for development or re-development, and then obtaining conventional permanent financing. Borrowers frequently find in proformas that even paying high interest rates and points may well be more cost-effective, than sharing appreciation with equity investors or partners, nor having to be confined by constraints of decision making or fiduciary obligations encountered with partners. Thus, one finds today’s hard money funding projects ranging from downtown high rise developments, to subdivisions on expanding edges of suburban markets
        Although the “Loan to Own” philosophy frames the parameters of every hard money lender’s thinking when considering a particular loan, each loan may present issues which should be considered. Among questions that should be asked are the following:
        1. If I foreclose on this property, is this an asset that fits my management skills, expertise and know-how; and if not, can I pay others to meet these needs?
        2. If this property is undeveloped, what is the likelihood of entitlements being obtained prior to the maturity date of the loan and if the entitlements are not obtained by the borrower, will I be able to obtain them?
        3. Do I have the ability to properly monitor the development activity of borrower?. 4. Am I investing in people, a project or dirt? As all three factors are important, how should they be weighted for the pending loan?
        5. Am I obtaining a first or second perfected lien in fee title (or a long term ground lease interest)?
        6. Is there a risk/reward benefit here that is heavily weighted towards reward? 7. If my loan is a second, do the loan documents of the senior lien holder permit junior encumbrances?
        Successful hard money lenders in today’s market not only address the questions above in prudent manner, but also carefully consider due diligence and legal strategies. In some instances, low overhead due diligence may be undertaken at the expense of a senior institutional lender, by obtaining all reports of a senior institutional investor, if the hard money loan is to be a second lien. Additionally, having communications with the institutional lender may open up horizons of insight, not to mention the beginnings of a good intercreditor relationship.
        The biggest difference between your father’s hard money loan and today’s hard money loan is that careful legal documentation is recommended. The one page form note and two-page form deed of trust do not adequately address a myriad of legal issues in

        today’s legal environment. Environmental issues need to be addressed, along with usury issues, and enforceability of guaranties and indemnities. Legal documentation should be at a level consistent with that employed by institutional lenders, only eliminating provisions that may not be relevant or not needed. Additionally, special consideration needs to be given to a well-drafted broker’s affidavit, especially in states that an otherwise usurious loan must be brokered by a licensed real estate broker. Title issues need to be closely reviewed. If the private borrower is a corporation, limited liability company, or partnership, the items that would appear on any institutional lender’s closing checklist (e.g., certificates of good standing and resolutions), should also be made part of the closing. All issues should be closely reviewed by legal counsel.
        Once made, the hard money loan should be carefully monitored. It may not be enough in today’s environment to simply collect checks as one might otherwise collect coupons. Instead, private hard money lenders should rely upon provisions in loan documents to review quarterly financials related to the property, and if the loan is a development project, maintain close scrutiny of all aspects of the development process, including receiving monthly reports and other materials which well-drafted loan documents will require a borrower provide to lender.
        While the volume of hard money loan dollars may never be reported in glossy national publications or lending industry updated daily internet sites, one must only listen to whispers of profit and success among the many lenders and borrowers who understand this market.
        In his next installment, Mr. Gerson will discuss the expanding secondary market for hard money loans. Who are buyers, who are sellers and whether there is a capital market of hard money loan securitizations.

  59. Sam, thank you for another thought provoking article!
    I think 10 million is a great number to shoot for! If you asked anyone even the richest people, if they would take a 10 million check, they would say YES! Even with the taxes. I’ve worked (wife and yours truly) for all we have ($0 inheritance and not expecting any). In college I worked 30 hours a week to pay for it. Graduated with almost no debt (state school). Got my professional license (engineering) and have kept working a side hustle since graduating college. We are 35 and have a net worth of ~500k in our house and retirement (200k house 300k retirement) (there is a level of luck involved in our story). This post helps to aim higher. We want to pass on some wealth to our heirs via a paid for college. With the cost of college going up 7ish% a year that’s a hard moving target to keep in sight. Keep the posts coming: excellent content!

    1. It feels good to make your own wealth doesn’t it? It’s much better than just getting handed millions from your parents.

      Aiming higher is free to do. Even if you don’t get to the target, I’m sure you will do much better than if you had much lower goals.

  60. This budget isn’t realistic, for a family of 4.
    $80 a month for 2 kids taking any kind of classes?
    Ballet or Gymnastics -> $100 / month for 1 kid
    Soccer -> $80 / month for 1 kid
    Swimming Lessons -> $140 / kid

    So if you want activities on 3 / 7 days, you’re looking at $600/month for 2 kids.
    Vacation $12,000? You’re looking at $2000-$3000 in flights alone to go anywhere. Rental car for family is going to cost you another $500. You want to bring the grandparents along so they can take care of the kids? Let’s take a higher end hotel, you’re paying $800-1000 / night, with maybe $500 for the grandparents. So yes, if you take one vacation a year this could work, but you’ll blow through this budget.

    Also what’s up with $150 / month for personal care products? Buy your razor blades at Costco or grow a beard! The wife doesn’t need La Mer.

    1. What is your annual budget with your two kids? Happy to compare notes.

      Flying economy class with four people rountrip to Hawaii costs $2,000 – $2,400. Then there’s lodging food and activities.

      1. Tbh, I don’t have a budget, but I might make one as I consider FIRE. I suspect that it will be more of an accounting than a budget though; with kids I’m at the NW where I am not going to say “playing baseball is too expensive with all the travel”.

        Regarding travel, I think when we bring / pay for extended family things get a bit more expensive on these sorts of luxury travel destinations. Vacations are a lot pricier when bringing along grandparents but ultimately https://seeyourfolks.com/ is what matters. You can get more money but you can’t get more time.

  61. When you put out these analysis, the numbers always look so high to me. Different lifestyle that’s hard for me to relate to I guess. I used to live in the NY metro and I can’t imagine spending so much. One of the benefits of NY is that you can geo arbitrage. May not be possible in a place like SF. But if you want that city living with all the bells and whistles and still have kids living with you, then likely $10 million seems right.

  62. It is odd that a government bond is considered “risk-free” while other asset classes are considered higher risk.

    I don’t consider any government “risk-free” and I’m not so sure that there aren’t safer asset classes. Or at least, some that come close.

    1. stuckinnova

      in this case the government is the US Government which

      A.) can print money
      B.) has the largest economy in the world
      C.) has the largest military in the world

      does any other asset class have these properties?

    2. Government is the only asset class that prints its own money. “risk-free” because it can’t default.

      1. When it prints money it is defaulting by paying you back in dollars that are worth less than the ones you lent.

      1. US dollars (fixed interest teasuries) are definitely not “risk-free”
        maybe TIPS are? (what do those pay these days?)

        might be worth it for you to draft a post on portfolio modeling, asset allocation to lower risk by diversification & including uncorrelated assets.

        1. If you don’t think US Treasuries are not risk-free, then all is good. Keeping cash locked in a safe 50 feet below ground is probably safe too.

          Guest post welcome on your proposed subject if you care to write it! thx

  63. I think $10m is a reasonable target, especially if you have kids and want to retire before they are launched. I can nit pick at where my family spends differently than the family in your example, as obviously there are a lot of variables depending on your kids, goals and hobbies, but for the purposes of a nice round number that is enough for both parents of two children to safely retire before the kids are launched, $10m feels right to me. I personally struggle to retire before 529 plans are fully funded and I (not my spouse and I together) have at least $100,000/year in passive income.

  64. When I was growing up I would have thought a million dollars would be way more than I ever needed for retirement. Thanks to inflation, insane medical costs in our country, more financial awareness, owning real estate, and dear dependents to raise and support, my number is much higher than 1 mil now. And I’m okay with that.

    I love how personal finance is so personal. One mil is way more than enough for some people, and I’m sure there are others who may get to 10mil and find it insufficient or mismanage it and feel financial stress. I don’t think I’ll get close to 10mil but it’s fun to have stretch goals. So much of my progress in financial independence has been pushing myself a little bit farther than I’m comfortable with to see if I can do more than I think. Great read Sam!

  65. I think ten million is more than you need unless you need live a “fancy pants” life style. I retired at 51 with less. The secret sauce is “feathering” income, working 2x harder when younger, resisting income/ lifestyle creep and learning to be a free thinker, perhaps a contrarian. Anyway, look what excellence gets you. Even the Lowell School in San Fransisco now will punish excellence in the name of mediocrity. This, on the same day the DOJ drops the lawsuit against Harvard and other higher learning institutes that discriminate against people, because they excel academically. Simply because of their CULTURE not melanin . Ten million, too much. Super glide with half that and leave S.F. Over achieving is highly over rated, especially now.

    1. Once you have 10 million, you no longer need to be excellent :) You just need to manage you wealth properly.

      Let’s see what happens to Lowell. Might be good as it will make it easier to get good grades if competition is lower.

  66. It is hugely more than needed. Nobody with a reasonable risk tolerance is going to invest in fixed income for the entire amount. Typically retired people keep somewhere around 50% in stocks. Also who says you can’t consume some of the principal? That’s a straw man argument assuming you can only use income generated by assets. You can’t take it with you and you’ll likely damage your kids if you leave them so much they are not required to ever work. Sure you can show how you could spend more than that in retirement, heck Johnny Depp could spend more than that in a month, but it wouldn’t be a reasonable case.

      1. What are your thoughts on airbnb/vacation-rentals in high-end markets? (Hamptons, Cape Cod, Martha’s Vineyard).

        We closed on a 4-bed waterfront in the Hamptons at the end of ’19. Last year, net $66k after the Q1 renovation finished right before shut-down. Ended the year with an annual occupancy rate of about 40%.

        Total capital investment of $300k so far (includes all expenses from closing costs, reno, maintenance, improvements, travel, all the way down to toilet paper, and cleaning supplies .etc). Last year carry costs of 32k (interest, taxes, insurance, utilities).

        This year, on pace to net ~$100k tax-free with about ~45% occupancy rate.

        The property value shooting up 50% on the back of covid was just a kicker – will never going time an investment better again. Free equity to tap for the next deal.

        Definitely, more management work than a year-round residential or storage rental (both of which we own as well) but the income stream just doesn’t compare. t seems pretty recession-proof as well — rich people vacation during covid just much as any other year. As long as your property is in the top quarter of that market, you can always mark down some to avoid vacancies even in down years.

        Don’t need $10M liquid to net $250k pre-tax. Just two short term vacation rentals netting $100k on schedule E. Not to mention the perk of having a free vacation destination open for personal use.

        1. Sounds good to me! Especially if it really did shoot up 50% in 1 year.

          Find your rental property limit. Mine is 3. I can’t deal with any more. Even with a prop manager.

    1. Most rich people still have jobs.

      The difference being they are free to work at what they want to work at, when and how long they work at it, and even where they work at it.

      Those are choices we should all want.

  67. Man, $10M sounds good right now! I’d set my investments and forget it. Certainly would give breathing room at the moment.

    I think realistically most folks should shoot for between $2-3M depending on how much they can live off of, it won’t be the perfect retirement, but it will be enough. But no reason not to aim high for the $10.

    You are 100% right that anything from college education expense for their kids, to healthcare could pop up and cause retirees to have to adjust their plans or go back to work altogether.

    1. That’s the thing though. With $10 million, you can’t set it and forget it. You’ve got to watch it carefully because you have a lot more to lose! This is one of the problems of having a lot of money.

  68. Nice summary Sam! As I’ve said many times to many who have asked, I think $10M IS the number in a HCOL+ environment for the reasons you outline too.

    I’ve lived it and have observed hundreds of others working towards it or something similar (some successfully and unsuccessfully of course). They all believe it is the right goal as well. I consider these experiences and the context to be a very useful anecdotal data set about realistic goals for FatFIRE wealth creation that I leverage frequently in my thinking.

    Change the environment to LCOL, geoarbitrage, no kids, no desire for multigenerational wealth, no big legacy interests, etc. and can you change the target down of course.

    A lot of this is a choice, but if you make that FatFIRE/HCOL+ choice you are on a path which is difficult. Worth it but difficult.

    I paid similar amounts across most of the expense categories you listed in your tabulation. Choosing to paying all of those HCOL expenses for 30 years, paying punishing taxes in all categories (especially a domicile like Canada), and having a wonderful lifestyle all the way is challenging. If things go right, by the end, you have the pile you need and the goal swings to protecting it and enjoying life, whatever that means to you.

    1. Thanks for sharing. Yes, more and more people I know are shooting for the $10 million number. It makes sense, especially if you are young, are earning more and facing tremendous inflation with housing, medical, and tuition.

  69. I am hoping to “retire” at 46 with $3MM and a part time salary of $125K between me and my wife. Our annual spend would be around $140K including private health insurance and $16k in 529 contributions for our 3 kids.

  70. Great read. I’d only mention thee fees of a brokerage account that need to be accounted for. Most likely if you’re at 10m then your not or should not be managing your own money. You’re retired.

    Generally, fees are around 1%. So $100k a year taken off that withdrawal.

    And for those in their early or mid thirties if 10m is on the horizon then I’d look at whole life insurance sooner than later.

      1. This. Even a typical robo advisor can give you 0.5% or less + benefits like tax loss harvesting.

    1. I’d avoid investment fees like the plague. I have a boatload of money and manage my own investments. It’s pretty simple now with ETFs like SPY and VNQ.

      It makes sense to speak with an accountant to minimize taxes. An advisor can also be helpful if one has a tendency to sell in a panic.

      For me, I don’t see much value in an advisor who takes 1% of my money every year.

      1. 100%. I was working with an advisor until November. I had a set it and forget it type mentality, but as I started to really teach myself more about investing starting a few years ago, I realized that I was making a huge mistake. Not only was he taking a 1% fee, but I wasn’t properly allocated for the 5 years I was working with him.

        Now detangling from that mess is a huge fiasco. And once I got the hang of making trades myself, I see how easy it is to manage. I can properly allocate, reduce fees to near nothing, and am setting myself up for a better retirement.

    2. Hmm… donno about paying 1% fee for $10 million. The fee is usually closer to 0.5% for $10 million. Further, I don’t know anybody with only $10 million who allocates 100% in stocks and bonds.

    3. Why do you need life insurance if your family will absolutely have enough money when you die? Whole life loses way too much to commissions no matter what. Why wouldn’t you just put the money in some tax-reduced account instead? Then you have access to the funds whenever you need, and you don’t lose a huge piece to commissions. I have even cashed out all my whole life, because I figured out that the investment results were so mediocre that I would eventually do better myself. I regret ever buying whole life: I should have bought term when younger. It once you have above a certain asset level, let that lapse, too, because your family is already cared for.

      1. Yes, I was wondering about this, too. Whether term or whole, the hypothetical family could eliminate this expense and save the $1,800 per year.

  71. Slightly off topic but if I’m getting 1 million in as a short term payout and want to invest for max growth, while keeping it moderately safe, how do I go about it?

    1. Maximum growth while keeping it safe is an oxymoron. You can’t accomplish both, unless you take some risk.

      Simple recommendation. Fidelity Zero Total Market Index fund. Zero fees and exposure to the broad market. If this is LONG TERM Money, set it and forget it.

  72. If you have $10M that ought to do it. However, I’m looking to check out with $3-$5M and pension worth $1.5M. Funny when I was young all I wanted was “stuff”. Now I’m tryhing to get rid of my stuff and have one or two quality items. Funny how age does that to you. I really look forward to waking up in the morning and being able to do exactly what I want to do! BTW Sam, huge fan of your work over the years!

    1. Ha, I have to admit, it is nice! But I wake up by 5 am in the morning to read and write before my kids get up. Then it’s a lot of time with them and other things b/c they are both at home.

      It’s a long day, but it’s a time I will cherish. Time is going by too fast.

  73. Thank you Sam, for another thought provoking article! 10 million is a very lofty goal. As for me, I started with very little. Paid my way through an average, State school by working and taking a manageable student loan. My parents helped where they were able. After college, I accepted a job with a large insurance carrier, and then, at age 28, went the self employed route to start my own business (Captive Insurance Agent). I will celebrate my 18th year in Agency and my 23rd year associated with my company, this year. I have created a networth of 1.9 million, I am 46. My NW is comprised of my rental real estate holdings, my simple IRA, equity in my principal residence and half ownership of my office building in an LLC, and cash savings.
    My retirement goal was 4 million by age 62 but this article makes me question my net target. I would like to think I can (and will) work for another 20 years, but 10 to 15 is more likely. Perhaps I shoot for 10 million and end up at 5 or 6? Please keep writing. Your work is very much appreciated.


    1. Jim!

      I LOVE you attitude. This is the attitude and strong money mindset that I aspire all readers and everyone to have!

      Further, I think you’ll be surprised at how big your net worth could grow in another 15-20 years. Just punch in $1.9 million in a compound interest calculator. After 18 years adding ZERO savings a year, and growing by 10% compounded, you will have $10.5 million.

      Play around with the numbers. You and others will be surprised at what you could do during this time frame.


      1. True. My wife and I have never won the lottery, have received no inheritances, and never started a company, or made the big money with the corner office, but we live well and still stay below our means.

        We won’t have ten million in our portfolio when we retire at 62, but if we don’t have it there by the time we reach 70 it will only be because everyone is investing in canned goods and firearms and burying them in their backyards.

      2. I used the amount of money I have in the market, for ten year and used your compound calculator with different rates of return. Great exercise. I learned my rate of return is what is important. A 2% higher rate of return over 10 years is huge.

    2. Many of the above assumptions need to be examined based on where you are in life. For me, for example, College costs are already accounted for and one of the two kids is almost done. So that goes away for me. I live in the midwest where the cost of living is much less than the big coastal cities mentioned. And if you are already in your 40s and planning on retiring at 62 that is much different than the people who retire in their 40s. You are cutting 20+ years off of the need to produce retirement income from your nest egg. That’s huge.

      The other assumption baked into that $10M number is only counting on a risk free rate of return. I am comfortable on assuming I can get a 4% rate of return. Based on my location, life expectancy, expenses and desired lifestyle I think my wife and I can realistically retire on $2M or more. $10M would be great. But i don’t expect I’ll get here unless I get really lucky. I also don’t expect it would be required for me in my circumstances.

      If you don’t have a mortgage that cost goes away. You can spend a lot less on food than outlined in the above budget. My landscaping spend is very close to 0. Country Club? LOL. Not my bag. A big chunk of the budget above is child costs and housing expenses. If those assumptions fit your lifestyle, I think there is a lot of merit to what is said here. They don’t fit for me, so my number is correspondingly smaller. Hopefully the same is true for most people that are 60+.

      1. Yes, all our financial goals are different because we’re all at different stages.

        “The other assumption baked into that $10M number is only counting on a risk free rate of return.”

        This is incorrect. I offer 1.1% – 4% and various investment options to get there, with no guarantees.

        Investing in a REIT ETF like VNQ, which has a yield of ~3%
        Investing in individual REITs like O, which has a yield of ~4.5%
        Investing in private eREITs, which have historically returned high single-digit yields, even during stock market sell-offs
        Investing in individual dividend-paying stocks like AT&T with a forward yield of ~7%
        Investing in a dividend ETF like VYM with a ~3% yield
        Buying rental property
        Lending out hard money (not a fan)
        Buying an annuity (not a fan either)

    3. I would shoot for no more than 10 years of add’l work, based on these typical comments from an early retirement forum:

      “Originally Posted by *****

      When I FIRED at 58/59 one of my colleagues also said he was going to retire. It was always one more year with him, some more money in his retirement portfolio. One more year turned into four more years.

      He had lots of retirement plans that included taking his children and grandchildren on a cruise. He finally did retire at 63/64. He dropped dead six months later.”

      “There are a lot of those in scenarios [where they] retire and die shortly after. It is amazing how many people I know in the last few years that have died under the age of 70. I would have to sit down and and count them but if I remember it was around 35 people in just a couple of years.”

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