Retirement with $8M in investments

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
User avatar
sergeant
Posts: 1716
Joined: Tue Dec 04, 2007 11:13 pm
Location: The Golden State

Re: Retirement with $8M in investments

Post by sergeant »

I don't answer first post questions that involve millions of dollars in assets. The poster never shows back up. Not sure why so many answer these trolls.
AA- 20+ Years of Expenses Fixed Income/The remainder in Equities.
itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: Retirement with $8M in investments

Post by itstoomuch »

^ Because, High NW, BogleHeads need help from other BogleHeaders who may not have have that much NW. :oops:

IMO, the principles of BH are the same for low NW to high NW. or is there a demarcation line between the two?
YMMV
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
timemoveson
Posts: 19
Joined: Tue Aug 30, 2016 12:09 pm

Re: Retirement with $8M in investments

Post by timemoveson »

Speaking for myself only, long time reader, we read and post on these topics because they are truly fascinating and go to the core of what modern society thinks about money, and how money actually works psychologically at the most basic level.

And we can get real help or be helpful. I'm in this guy's general position, but I don't have the same issues. So, whether the guy comes back or not, here's the 100's or thoughts of very smart people on a really important set of human topics that can help many others who are there or getting there.

This is far more interesting than much of the falsely precise mathematical minutiae which litter these forums and others.
dbr
Posts: 34901
Joined: Sun Mar 04, 2007 9:50 am

Re: Retirement with $8M in investments

Post by dbr »

timemoveson wrote:Speaking for myself only, long time reader, we read and post on these topics because they are truly fascinating and go to the core of what modern society thinks about money, and how money actually works psychologically at the most basic level.

And we can get real help or be helpful. I'm in this guy's general position, but I don't have the same issues. So, whether the guy comes back or not, here's the 100's or thoughts of very smart people on a really important set of human topics that can help many others who are there or getting there.

This is far more interesting than much of the falsely precise mathematical minutiae which litter these forums and others.
This is so true and a good reminder of it. I would say, however, that the falsely precise (They are falsely precise) minutiae also have the same benefits of being interesting and also of lending perspective.
wolf359
Posts: 2280
Joined: Sun Mar 15, 2015 8:47 am

Re: Retirement with $8M in investments

Post by wolf359 »

WhiteMaxima wrote:Money is never enough. You ask W Buffet what he is satisfied with his $100bil. He is 80s and still worry about that 100bil is enough for his retirement.
Warren Buffett isn't working because he is worried about his retirement. He is working because investing is his favorite thing in the world to do.
"I would rather do this than anything in the world. My Social Security check is coming every day. I don't need this."

Like the title of Loomis' book Tap Dancing To Work, Buffett said that's exactly how he feels when going to the office.

"I'm tap dancing to work every day. There's nothing more exciting than to get there. It doesn't get better than that."
http://www.businessinsider.com/why-buff ... re-2015-10
Gropes & Ray
Posts: 1094
Joined: Wed Jul 16, 2014 7:28 am

Re: Retirement with $8M in investments

Post by Gropes & Ray »

I agree that OP is most probably a troll, but this thread hasn't devolved into a flame war over religion with Hitler references scattered around. This has been a respectful discussion of wealth that may be informative to all of the non-trolls who participated. Now go post the same thing on MMM and see the face-punches fly!
itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: Retirement with $8M in investments

Post by itstoomuch »

What means, "MMM" ?
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
HenrysPlan2
Posts: 116
Joined: Tue Dec 06, 2016 9:19 pm

Re: Retirement with $8M in investments

Post by HenrysPlan2 »

I wonder how could you possibly accumulate $8m at age 53? it seems a lot of money. do you mind to share? I am close to 40 and no where near that.
User avatar
HomerJ
Posts: 16035
Joined: Fri Jun 06, 2008 12:50 pm

Re: Retirement with $8M in investments

Post by HomerJ »

itstoomuch wrote:What means, "MMM" ?
Mr. Money Mustache.

A blog written by a guy who pretends he is retired on $25k a year.
Gropes & Ray
Posts: 1094
Joined: Wed Jul 16, 2014 7:28 am

Re: Retirement with $8M in investments

Post by Gropes & Ray »

If you want to watch this forum get uncharacteristically uncivil quickly, start debating whether Mr. Money Mustache is really retired and if extreme frugality is worth it. I suggest we don't get into that. :beer
RAchip
Posts: 482
Joined: Sat May 07, 2016 7:31 pm

Re: Retirement with $8M in investments

Post by RAchip »

rrppve wrote:
RAchip wrote:"I encourage you to run the math on whether you have enough. I bet you can spend under 1 mil per year with some very very basic prioritization."

Actually, my annual expenses are in that range. Of course I could cut costs but I'm not ready to do that yet. My one true luxury "frivolous" expense is Netjets ($200k/year). But things are hectic for me and we use it exclusively to get to our vacation house in Florida in an unbelievably convenient way.

What I have been struggling with is whether I can retire at 51 with around $1mm expenses/year and a NW around $30mm.
Can easily lower the jet cost with any of the these options:
Use Flexjet or another lower cost fractional
Downgrade to a Jet Card, especially if you're not using all your hours and don't use it on Super Bowl Sunday
Ditch fractional and go charter
Just use empty leg charter on the resale market
Commercial First Class and a good mileage program
Cattle car coach

You have lots of options in how to trim this expense. NetJets is by far the most expensive fractional provider. Also, while I agree that it is a time-saver and has real convenience, there's almost always a huge ego component in flying private. The only time it's justified in my opinion, is if you live in Podunk and you also have multiple businesses in other Podunks. In that case, it actually can make economic sense.
But if I was at your level of wealth, I might fly private at least in good years. In down market years, cut down on private and try commercial. There's no doubt that you can retire. It's just a question of if you want to. Many high earners get their primary sense of self-worth from their work.

P.S. Now trolled for 100 posts! Pretty impressive.
I have flown commercial a lot. And I tried various other private charters. The cost of net jets versus other private options is not significant unless you get lucky with filling open return legs and other factors. I have 6 kids and a dog. Its so amazing to be able to decide to go to our place in florida, call netjets and have a plane in 4 hours. Its a 15 minute ride to our local airport (45 to the closest big commercial one). Pull the car up to the plane and wheels up in 5 minutes. And the dog comes which avoids other hassle. Smaller airport is a few minutes from our house in Florida.

What I want to do is just retire and move to florida and sell all the other real estate. But its hard to pull the trigger on that given the huge complex family operation we have.
HenrysPlan2
Posts: 116
Joined: Tue Dec 06, 2016 9:19 pm

Re: Retirement with $8M in investments

Post by HenrysPlan2 »

marktop wrote:I'm 53yr old, have ~$8M in various mutual funds, stocks, ETFs, bond funds. House is almost paid off with no plans to move. 3 kids to put through college. Living in the SF bay area in a house valued at about $4M, and all this does not make us feel wealthy with a net worth over $14M (including a rental house). We live a simple lifestyle with no expensive vacations or large expenses.

I have never used an investment advisor and wish I had followed the advice of the first investment book I read (DCA into S&P 500 fund). After 2 decades of trying to beat the S&P 500 and not being able to, all recent investments have been going into VTI and VOO.

In order to retire, should I move all investments (some at Fidelity and Etrade in funds) to VTI and VOO. Any suggestions? Also, at what net worth do people feel wealthy? This is a subjective question, but in Silicon Valley its just crazy with the wealth some people have generated.

Marktop, is it possible to help us to understand how could you accumulated $14m? how did you get here?
User avatar
HomerJ
Posts: 16035
Joined: Fri Jun 06, 2008 12:50 pm

Re: Retirement with $8M in investments

Post by HomerJ »

HenrysPlan2 wrote:
marktop wrote:I'm 53yr old, have ~$8M in various mutual funds, stocks, ETFs, bond funds. House is almost paid off with no plans to move. 3 kids to put through college. Living in the SF bay area in a house valued at about $4M, and all this does not make us feel wealthy with a net worth over $14M (including a rental house). We live a simple lifestyle with no expensive vacations or large expenses.

I have never used an investment advisor and wish I had followed the advice of the first investment book I read (DCA into S&P 500 fund). After 2 decades of trying to beat the S&P 500 and not being able to, all recent investments have been going into VTI and VOO.

In order to retire, should I move all investments (some at Fidelity and Etrade in funds) to VTI and VOO. Any suggestions? Also, at what net worth do people feel wealthy? This is a subjective question, but in Silicon Valley its just crazy with the wealth some people have generated.

Marktop, is it possible to help us to understand how could you accumulated $14m? how did you get here?
He lives in San Fran - I assume some kind of software startup
User avatar
goodenyou
Posts: 2605
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: Retirement with $8M in investments

Post by goodenyou »

Comparing to others is never a good strategy. Unless, of course, it is comparing to people who have less. That is rarely done. Feeling you have enough is knowing what your goals are. If you want to move into an $8 million dollar house, have a private jet and travel around the world, you may not have enough. I am always amazed at how much more I think I have when I want for less.
"Ignorance more frequently begets confidence than does knowledge" | “Do you know how to make a rain dance work? Dance until it rains”
bigred77
Posts: 2042
Joined: Sat Jun 11, 2011 4:53 pm

Re: Retirement with $8M in investments

Post by bigred77 »

RAchip wrote:
I have flown commercial a lot. And I tried various other private charters. The cost of net jets versus other private options is not significant unless you get lucky with filling open return legs and other factors. I have 6 kids and a dog. Its so amazing to be able to decide to go to our place in florida, call netjets and have a plane in 4 hours. Its a 15 minute ride to our local airport (45 to the closest big commercial one). Pull the car up to the plane and wheels up in 5 minutes. And the dog comes which avoids other hassle. Smaller airport is a few minutes from our house in Florida.

What I want to do is just retire and move to florida and sell all the other real estate. But its hard to pull the trigger on that given the huge complex family operation we have.
I don't know if helps to look at things from this perspective but if you would like to retire, but have not because of concerns about your nest egg being able to cover your desired lifestyle for the rest of your life (plus any bequest motives you may have), then you are essentially still working just to afford taking private planes when you travel. 20% of your annual expenses are netjets. I don't know how much first class tickets are from your city to Florida but I'll bet you could take the family to and from with 1st class seats about 3-4 times per year for less than $25k.
JW-Retired
Posts: 7189
Joined: Sun Dec 16, 2007 12:25 pm

Re: Retirement with $8M in investments

Post by JW-Retired »

Gropes & Ray wrote:I agree that OP is most probably a troll, but this thread hasn't devolved into a flame war over religion with Hitler references scattered around................
I think maybe OP is legit and will come back. He/she posted late afternoon Sunday. Could well be he works long hours weekdays and won't have a look back here until the weekend.

Then he can read all 114+ responses! :twisted:
JW
Retired at Last
chicagoan23
Posts: 436
Joined: Thu Jan 29, 2015 4:34 pm

Re: Retirement with $8M in investments

Post by chicagoan23 »

I have flown commercial a lot. And I tried various other private charters. The cost of net jets versus other private options is not significant unless you get lucky with filling open return legs and other factors. I have 6 kids and a dog. Its so amazing to be able to decide to go to our place in florida, call netjets and have a plane in 4 hours. Its a 15 minute ride to our local airport (45 to the closest big commercial one). Pull the car up to the plane and wheels up in 5 minutes. And the dog comes which avoids other hassle. Smaller airport is a few minutes from our house in Florida.

What I want to do is just retire and move to florida and sell all the other real estate. But its hard to pull the trigger on that given the huge complex family operation we have.
In all seriousness if I were you I'd keep working, not just for a few more years but for as long as you are physically able to work. Your family is accustomed to a certain lifestyle and that is going to be very hard to break out of. When you do retire, I would guess that the six kids (and then their spouses, and then the grandkids, etc.) will still want to live the type of lifestyle that generates $1 million in expenses per year for you now. You may be able to downsize, but will they? Keep going and get it up to $50 million or more.

Also, while you are working get a great estate plan in place too.
"The Basic Choices for Investors and the One We Strongly Prefer" | | https://www.berkshirehathaway.com/letters/2011ltr.pdf
User avatar
HomerJ
Posts: 16035
Joined: Fri Jun 06, 2008 12:50 pm

Re: Retirement with $8M in investments

Post by HomerJ »

chicagoan23 wrote:
I have flown commercial a lot. And I tried various other private charters. The cost of net jets versus other private options is not significant unless you get lucky with filling open return legs and other factors. I have 6 kids and a dog. Its so amazing to be able to decide to go to our place in florida, call netjets and have a plane in 4 hours. Its a 15 minute ride to our local airport (45 to the closest big commercial one). Pull the car up to the plane and wheels up in 5 minutes. And the dog comes which avoids other hassle. Smaller airport is a few minutes from our house in Florida.

What I want to do is just retire and move to florida and sell all the other real estate. But its hard to pull the trigger on that given the huge complex family operation we have.
In all seriousness if I were you I'd keep working, not just for a few more years but for as long as you are physically able to work. Your family is accustomed to a certain lifestyle and that is going to be very hard to break out of. When you do retire, I would guess that the six kids (and then their spouses, and then the grandkids, etc.) will still want to live the type of lifestyle that generates $1 million in expenses per year for you now. You may be able to downsize, but will they? Keep going and get it up to $50 million or more.

Also, while you are working get a great estate plan in place too.
This is a good point. The kids are now used to NetJets. We talk about lifestyle creep a lot here. It is indeed hard to go backwards.
Grt2bOutdoors
Posts: 23368
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Retirement with $8M in investments

Post by Grt2bOutdoors »

What is so great about Netjets? What am I missing?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Quark
Posts: 1045
Joined: Sun Nov 01, 2015 5:32 pm

Re: Retirement with $8M in investments

Post by Quark »

Grt2bOutdoors wrote:What is so great about Netjets? What am I missing?
You don't have to fly with strangers.
Grt2bOutdoors
Posts: 23368
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Retirement with $8M in investments

Post by Grt2bOutdoors »

Quark wrote:
Grt2bOutdoors wrote:What is so great about Netjets? What am I missing?
You don't have to fly with strangers.
For $200k, I could buy alot of the "right" company to fly with me.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Quark
Posts: 1045
Joined: Sun Nov 01, 2015 5:32 pm

Re: Retirement with $8M in investments

Post by Quark »

Grt2bOutdoors wrote:
Quark wrote:
Grt2bOutdoors wrote:What is so great about Netjets? What am I missing?
You don't have to fly with strangers.
For $200k, I could buy alot of the "right" company to fly with me.
You don't have to stand in line, deal with airport security, deal with connections, wait for others to board, be restricted to public airports, worry about lost luggage. You fly when you want rather than on the airline's schedule. You can choose the catering.

I'm starting to sound like a commercial. The downside is that it's very expensive, especially if you want to fly over an ocean.
Bonanza77
Posts: 17
Joined: Thu Dec 31, 2015 7:42 pm

Re: Retirement with $8M in investments

Post by Bonanza77 »

Quark wrote:
Grt2bOutdoors wrote:
Quark wrote:
Grt2bOutdoors wrote:What is so great about Netjets? What am I missing?
You don't have to fly with strangers.
For $200k, I could buy alot of the "right" company to fly with me.
I'm starting to sound like a commercial. The downside is that it's very expensive, especially if you want to fly over an ocean.
For 3-5 people with very minimal luggage, on the smallest jet in the fleet, it's roughly $5,000...per hour. For something that could accommodate RAchip and family, you're looking at $10,000/hour, easy.
APB
Posts: 118
Joined: Mon Apr 25, 2016 8:24 pm
Location: NYC

Re: Retirement with $8M in investments

Post by APB »

RAchip wrote:
rrppve wrote:
RAchip wrote:"I encourage you to run the math on whether you have enough. I bet you can spend under 1 mil per year with some very very basic prioritization."

Actually, my annual expenses are in that range. Of course I could cut costs but I'm not ready to do that yet. My one true luxury "frivolous" expense is Netjets ($200k/year). But things are hectic for me and we use it exclusively to get to our vacation house in Florida in an unbelievably convenient way.

What I have been struggling with is whether I can retire at 51 with around $1mm expenses/year and a NW around $30mm.
Can easily lower the jet cost with any of the these options:
Use Flexjet or another lower cost fractional
Downgrade to a Jet Card, especially if you're not using all your hours and don't use it on Super Bowl Sunday
Ditch fractional and go charter
Just use empty leg charter on the resale market
Commercial First Class and a good mileage program
Cattle car coach

You have lots of options in how to trim this expense. NetJets is by far the most expensive fractional provider. Also, while I agree that it is a time-saver and has real convenience, there's almost always a huge ego component in flying private. The only time it's justified in my opinion, is if you live in Podunk and you also have multiple businesses in other Podunks. In that case, it actually can make economic sense.
But if I was at your level of wealth, I might fly private at least in good years. In down market years, cut down on private and try commercial. There's no doubt that you can retire. It's just a question of if you want to. Many high earners get their primary sense of self-worth from their work.

P.S. Now trolled for 100 posts! Pretty impressive.
I have flown commercial a lot. And I tried various other private charters. The cost of net jets versus other private options is not significant unless you get lucky with filling open return legs and other factors. I have 6 kids and a dog. Its so amazing to be able to decide to go to our place in florida, call netjets and have a plane in 4 hours. Its a 15 minute ride to our local airport (45 to the closest big commercial one). Pull the car up to the plane and wheels up in 5 minutes. And the dog comes which avoids other hassle. Smaller airport is a few minutes from our house in Florida.

What I want to do is just retire and move to florida and sell all the other real estate. But its hard to pull the trigger on that given the huge complex family operation we have.
If you do that, your invested assets could balloon to around 26 mil, assuming a 4 mil Florida mansion. Cut netjets (no need to fly to FL anymore) and 800K / 26mil has historically been a very safe withdrawal rate.

Assuming your stated desires, it is highly likely that you have enough to retire. Now, if you want to continue working because you love your job, or want to pass off a big estate, or donate generously to charity, that's great. But if you hate your job you could quit today and buy the things you want. Expenses will also go down when kids graduate college.
My posts represent my own opinion and do not constitute financial advice. I am simply a hobbyist. :)
randomguy
Posts: 9208
Joined: Wed Sep 17, 2014 9:00 am

Re: Retirement with $8M in investments

Post by randomguy »

chicagoan23 wrote:
I have flown commercial a lot. And I tried various other private charters. The cost of net jets versus other private options is not significant unless you get lucky with filling open return legs and other factors. I have 6 kids and a dog. Its so amazing to be able to decide to go to our place in florida, call netjets and have a plane in 4 hours. Its a 15 minute ride to our local airport (45 to the closest big commercial one). Pull the car up to the plane and wheels up in 5 minutes. And the dog comes which avoids other hassle. Smaller airport is a few minutes from our house in Florida.

What I want to do is just retire and move to florida and sell all the other real estate. But its hard to pull the trigger on that given the huge complex family operation we have.
In all seriousness if I were you I'd keep working, not just for a few more years but for as long as you are physically able to work. Your family is accustomed to a certain lifestyle and that is going to be very hard to break out of. When you do retire, I would guess that the six kids (and then their spouses, and then the grandkids, etc.) will still want to live the type of lifestyle that generates $1 million in expenses per year for you now. You may be able to downsize, but will they? Keep going and get it up to $50 million or more.

Also, while you are working get a great estate plan in place too.
Problem is that by the time you get to 50 million, the kids will be used to a 2 million/yr lifestyle. At some point some yacht share will sound good:) But yeah realistically the kids will struggle to reproduce this level of success. Become a surgeon and making 500k/yr (i.e. a very successful outcome) and you are still looking at something like 1/3 of the spending that they are used to. Be a more normal level of successful (say 150k) and you are looking at something like 1/10th the spending ability. Rich kids get no sympathy for their problems but that doesn't mean they don't have problems. As a parent you end up having to decide how much you want to prop them up and that is not an easy choice.
expat
Posts: 782
Joined: Mon Mar 10, 2008 9:07 pm

Re: Retirement with $8M in investments

Post by expat »

I have a NW of over 30mm (9mm real estate and 21mm stocks/bonds/cash) and no debt. I'm 51 years old and I would like to retire but I am not yet confident in doing it.
What?
RAchip
Posts: 482
Joined: Sat May 07, 2016 7:31 pm

Re: Retirement with $8M in investments

Post by RAchip »

I don't have crazy cars, I don't have crazy houses ( they are on the bigger side because we need 8 bedrooms but they are older with plastic inserts for many shower stalls, etc). Nothing overly extravagant. The vacation house in FL we love is an old rancher (updated a bit but nothing gold plated or whatever its just in an amazing location on the beach so it was expensive, but nor $4mm). We have the primary residence where me and all the kids have roots; we have places at the "local" beach in the North East that we can drive to in 2 hours and we have a place in FL. All I can say is that once you have things, its hard to cut down. After you get used to flying Netjets its hard to go back to commercial. The thing is that my calculation is that it will probably be fine if I retire and don't change anything right away. Its just a bit of a close call if there is a down-turn in the next few years. Obviously when the kids get older and I get older we would simplify things. I have seen a number of friends my age die and I certainly don't want to "waste" years working when I could be fishing. I know it sounds ridiculous but if I had a little more or was a little older I would feel safer about quitting.
randomguy
Posts: 9208
Joined: Wed Sep 17, 2014 9:00 am

Re: Retirement with $8M in investments

Post by randomguy »

RAchip wrote:I don't have crazy cars, I don't have crazy houses ( they are on the bigger side because we need 8 bedrooms but they are older with plastic inserts for many shower stalls, etc). Nothing overly extravagant. The vacation house in FL we love is an old rancher (updated a bit but nothing gold plated or whatever its just in an amazing location on the beach so it was expensive, but nor $4mm). We have the primary residence where me and all the kids have roots; we have places at the "local" beach in the North East that we can drive to in 2 hours and we have a place in FL. All I can say is that once you have things, its hard to cut down. After you get used to flying Netjets its hard to go back to commercial. The thing is that my calculation is that it will probably be fine if I retire and don't change anything right away. Its just a bit of a close call if there is a down-turn in the next few years. Obviously when the kids get older and I get older we would simplify things. I have seen a number of friends my age die and I certainly don't want to "waste" years working when I could be fishing. I know it sounds ridiculous but if I had a little more or was a little older I would feel safer about quitting.
I think you will find your definition of crazy is different than most people. You can try and justify 9 million dollars of real estate (I need x bedrooms, it is all in the land not fancy floors) but at the end of the day it is still 9 million of real estate.:) It might not be ostentatious (spending 300k/yr on private school isn't as flashy as buying a 300k car) but you can't spend money like that without crazy spending. The costs of basic food, clothes, and the like just isn't high enough to burn through more than 100k. You end up thinking crazy stuff (10k for a yard service, 20k for a personal trainer, 20k/yr for the golf & tennis club, 20k on musical lessons, 50k for summer camps, 60k for a nanny, 30k on eating out, drinking 150+ dollar bottles of wine ....) is normal. It isn't. I am not saying don't spend the money. But don't try and pretend it isn't crazy. Embrace it:)


Obviously with your level of spending 20-30% drops are easy to do (i.e. selling 2 houses probably gets you close). But if you don't want to do that, work another 3 or 4 years. Odds are market appreciation will rapidly increase your safety margins. Not to mention have less years to plan for.
RAchip
Posts: 482
Joined: Sat May 07, 2016 7:31 pm

Re: Retirement with $8M in investments

Post by RAchip »

"The costs of basic food, clothes, and the like just isn't high enough to burn through more than 100k."

Here is some of the reality: real-estate tax-85k, housekeeper-45k; electric, gas, water and cable for 6 properties- 90k; maintenance (including landscaping) on 6 properties (65k); Insurance (including cars for teenagers and umbrella policy) 95k; food for huge family 75k. That's just the beginning.
randomguy
Posts: 9208
Joined: Wed Sep 17, 2014 9:00 am

Re: Retirement with $8M in investments

Post by randomguy »

RAchip wrote:"The costs of basic food, clothes, and the like just isn't high enough to burn through more than 100k."

Here is some of the reality: real-estate tax-85k, housekeeper-45k; electric, gas, water and cable for 6 properties- 90k; maintenance (including landscaping) on 6 properties (65k); Insurance (including cars for teenagers and umbrella policy) 95k; food for huge family 75k. That's just the beginning.
Yes and none of that stuff is basic spending. It is pretty much all housing costs as a result of you choosing to own 6 houses (i.e. luxury spending ) instead of 1. Nothing wrong with that if it maximizes your happiness. But it still is crazy spending:)
oragne lovre
Posts: 504
Joined: Tue Nov 25, 2008 3:34 pm

Re: Retirement with $8M in investments

Post by oragne lovre »

Has anyone noticed that the OP has not responded after 3 days?
The finest, albeit the most difficult, of all human achievements is being reasonable.
itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: Retirement with $8M in investments

Post by itstoomuch »

oragne lovre wrote:Has anyone noticed that the OP has not responded after 3 days?
He's been replaced by RAchip. :idea:
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
User avatar
abuss368
Posts: 23809
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Retirement with $8M in investments

Post by abuss368 »

I honestly would not even want that lifestyle and stress.
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
HomerJ
Posts: 16035
Joined: Fri Jun 06, 2008 12:50 pm

Re: Retirement with $8M in investments

Post by HomerJ »

RAchip wrote:"The costs of basic food, clothes, and the like just isn't high enough to burn through more than 100k."

Here is some of the reality: real-estate tax-85k, housekeeper-45k; electric, gas, water and cable for 6 properties- 90k; maintenance (including landscaping) on 6 properties (65k); Insurance (including cars for teenagers and umbrella policy) 95k; food for huge family 75k. That's just the beginning.
Seems like you've answered your own question. Sell a few properties, your investable assets go up, and your expenses go down. You'll have more coming in from investment returns/dividends, and less going out for expenses. Double win.

It's pretty easy math.

Drop down to 1-3 properties, and you could retire tomorrow. You can still visit those favorite locations and rent for a week or a month, right? 6 properties is bit much. How much time are you spending in that 5th and 6th favorite house? Are they really worth paying all the property taxes, maintenance, utilities year round for the few weeks/months you are there?

Just like you don't own a jet, and instead rent one when you need it, do the same for some of your houses. Sell them, invest the money, and if you want to visit that same area now and then, rent for a couple of weeks.

Of course I'm assuming they are all vacation homes... If you have relatives living in some of them year-round, then it may not be as easy to sell them.
inbox788
Posts: 7933
Joined: Thu Mar 15, 2012 5:24 pm

Re: Retirement with $8M in investments

Post by inbox788 »

randomguy wrote:
RAchip wrote:"The costs of basic food, clothes, and the like just isn't high enough to burn through more than 100k."

Here is some of the reality: real-estate tax-85k, housekeeper-45k; electric, gas, water and cable for 6 properties- 90k; maintenance (including landscaping) on 6 properties (65k); Insurance (including cars for teenagers and umbrella policy) 95k; food for huge family 75k. That's just the beginning.
Yes and none of that stuff is basic spending. It is pretty much all housing costs as a result of you choosing to own 6 houses (i.e. luxury spending ) instead of 1. Nothing wrong with that if it maximizes your happiness. But it still is crazy spending:)
Yes, 6 houses does sound a bit crazy. How many days a year are they occupied? It's one thing if it's 2 months in each and the rest of the 10 months the houses are gathering dust. It's another if you've got 4 wives and older children that occupy all the homes nearly 100% of the time. If you make 10-20x the average person, you can manage the homes the same way average people manage one. If you divide by 10, the expenses don't sound so bizarre. How many mouths does 75k feed? That's either a lot of food and/or a lot of mouths.
tphp99
Posts: 344
Joined: Sun Jan 03, 2010 8:47 pm

Re: Retirement with $8M in investments

Post by tphp99 »

itstoomuch wrote:
oragne lovre wrote:Has anyone noticed that the OP has not responded after 3 days?
He's been replaced by RAchip. :idea:
X10
OP needs $8M
RAchip needs $80M
It's all relative with money, isn't it?
Makes for enjoyable reading, people wanting to retire on $25K/yr vs people needing north of $1M.
Which one makes you cringe?
ks289
Posts: 655
Joined: Sun Mar 11, 2012 12:42 pm

Re: Retirement with $8M in investments

Post by ks289 »

RAchip wrote:I don't have crazy cars, I don't have crazy houses ( they are on the bigger side because we need 8 bedrooms but they are older with plastic inserts for many shower stalls, etc). Nothing overly extravagant. The vacation house in FL we love is an old rancher (updated a bit but nothing gold plated or whatever its just in an amazing location on the beach so it was expensive, but nor $4mm). We have the primary residence where me and all the kids have roots; we have places at the "local" beach in the North East that we can drive to in 2 hours and we have a place in FL. All I can say is that once you have things, its hard to cut down. After you get used to flying Netjets its hard to go back to commercial. The thing is that my calculation is that it will probably be fine if I retire and don't change anything right away. Its just a bit of a close call if there is a down-turn in the next few years. Obviously when the kids get older and I get older we would simplify things. I have seen a number of friends my age die and I certainly don't want to "waste" years working when I could be fishing. I know it sounds ridiculous but if I had a little more or was a little older I would feel safer about quitting.
Congratulations on your financial success.

I fully appreciate the appeal of having your own nice place for every season and purpose and traveling in style.
On the other hand, you are quite reasonable to be cautious about early retirement when your expenses are already very high. Professional athletes have commonly run into financial difficulties after retirement from their spending habits even after making $100 million in their careers.

It is important for all of us to be self aware regarding our good fortune, the cost of maintaining our lifestyle, and the difficulty of trying to "simplify things" in the future.
User avatar
JDCarpenter
Posts: 1573
Joined: Tue Sep 09, 2014 2:42 pm

Re: Retirement with $8M in investments

Post by JDCarpenter »

tphp99 wrote:...
It's all relative with money, isn't it?
Makes for enjoyable reading, people wanting to retire on $25K/yr vs people needing north of $1M.
Which one makes you cringe?
Actually, both! But that just goes to show it is all relative. (Sort of like "top 1%" -- like most who nose into that cohort, I'm far closer financially to my brother (a bricklayer, like Dad) than to Warren Buffet. :happy )
Edit Signature
10YearPlan
Posts: 262
Joined: Tue Dec 22, 2015 2:58 pm

Re: Retirement with $8M in investments

Post by 10YearPlan »

inbox788 wrote:
randomguy wrote:
RAchip wrote:"The costs of basic food, clothes, and the like just isn't high enough to burn through more than 100k."

Here is some of the reality: real-estate tax-85k, housekeeper-45k; electric, gas, water and cable for 6 properties- 90k; maintenance (including landscaping) on 6 properties (65k); Insurance (including cars for teenagers and umbrella policy) 95k; food for huge family 75k. That's just the beginning.
Yes and none of that stuff is basic spending. It is pretty much all housing costs as a result of you choosing to own 6 houses (i.e. luxury spending ) instead of 1. Nothing wrong with that if it maximizes your happiness. But it still is crazy spending:)
Yes, 6 houses does sound a bit crazy. How many days a year are they occupied? It's one thing if it's 2 months in each and the rest of the 10 months the houses are gathering dust. It's another if you've got 4 wives and older children that occupy all the homes nearly 100% of the time. If you make 10-20x the average person, you can manage the homes the same way average people manage one. If you divide by 10, the expenses don't sound so bizarre. How many mouths does 75k feed? That's either a lot of food and/or a lot of mouths.
RAChip, I just want to thank you for sharing details. Most people would not, for fear of the commentary. I have nowhere near your level of wealth, so for me it's a little like living vicariously through you. I totally get that cutting back from the lifestyle once you are accustomed to it, would be very difficult, not just for you. But I can't wrap my brain around 6 houses. It seems excessively excessive, you know? That said, I totally get having 3 houses--main residence, beach house nearby and FL house, lol. I am actually surprised your housekeeper and RE tax costs are so low.
User avatar
David Jay
Posts: 10180
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Retirement with $8M in investments

Post by David Jay »

tphp99 wrote:
itstoomuch wrote:
oragne lovre wrote:Has anyone noticed that the OP has not responded after 3 days?
He's been replaced by RAchip. :idea:
X10
OP needs $8M
RAchip needs $80M
It's all relative with money, isn't it?
Makes for enjoyable reading, people wanting to retire on $25K/yr vs people needing north of $1M.
Which one makes you cringe?
And I was getting ready to post a new thread with a request for a "2 years to retirement checkup". Mid-6 digit portfolio and $50,000 annual expenses. I now feel like a pauper.

(especially after the NetJets discussion, I have a pilot-friend who flies for NetJets)
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
stoptothink
Posts: 8994
Joined: Fri Dec 31, 2010 9:53 am

Re: Retirement with $8M in investments

Post by stoptothink »

RAchip wrote:"The costs of basic food, clothes, and the like just isn't high enough to burn through more than 100k."

Here is some of the reality: real-estate tax-85k, housekeeper-45k; electric, gas, water and cable for 6 properties- 90k; maintenance (including landscaping) on 6 properties (65k); Insurance (including cars for teenagers and umbrella policy) 95k; food for huge family 75k. That's just the beginning.
You are awesome for being so upfront and honest. Randomguy's statement still ring true. We're a pretty successful (financially) family, our income is nearly 4x the national average, yet our total household expenditures are pretty close to what you spend a year on a housekeeper. And yes, we have kids (two, who are both in daycare to the tune of $1550/month). Your spending doesn't sound lavish or over-the-top because it is what you have become accustomed to, but realize that to 99% of the population it most certainly is.

The only thing I can say is that you've earned yourself a whole heck of a lot of options. Almost all of us would feel very secure in retiring today if we were in your shoes, but you (and your family) have become accustomed to a lifestyle that most of us wouldn't dream of - regardless of the fact that you don't see it as lavish. No judgement here, you've been astronomically more successful than I (or most here) could ever dream of, that success clearly comes with its own set of issues (which I do not envy). As has been said, your main concern moving forward is that your children are now faced with the reality of having to be uber-successful like yourself because they are used to that lifestyle. This is the sole reason my wife and I have been very determined to keep the lifestyle creep to a minimum.
nova1968
Posts: 227
Joined: Wed May 18, 2016 12:00 pm

Re: Retirement with $8M in investments

Post by nova1968 »

David Jay wrote:
tphp99 wrote:
itstoomuch wrote:
oragne lovre wrote:Has anyone noticed that the OP has not responded after 3 days?
He's been replaced by RAchip. :idea:
X10
OP needs $8M
RAchip needs $80M
It's all relative with money, isn't it?
Makes for enjoyable reading, people wanting to retire on $25K/yr vs people needing north of $1M.
Which one makes you cringe?
And I was getting ready to post a new thread with a request for a "2 years to retirement checkup". Mid-6 digit portfolio and $50,000 annual expenses. I now feel like a pauper.

(especially after the NetJets discussion, I have a pilot-friend who flies for NetJets)

I believe your financial situation relates more to the norm, It seems the richer you are the more responses you get but then again on this blog you can be whoever you want to be, but who knows he could be Legit.
User avatar
abuss368
Posts: 23809
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Retirement with $8M in investments

Post by abuss368 »

Bogleheads,

This has been an interesting thread. However, I would like to ask where the original poster is? The poster has one post (this thread) to their name.

Interesting considering the question and very high volume of responses.
John C. Bogle: “Simplicity is the master key to financial success."
randomguy
Posts: 9208
Joined: Wed Sep 17, 2014 9:00 am

Re: Retirement with $8M in investments

Post by randomguy »

nova1968 wrote:
David Jay wrote:
tphp99 wrote:
itstoomuch wrote:
oragne lovre wrote:Has anyone noticed that the OP has not responded after 3 days?
He's been replaced by RAchip. :idea:
X10
OP needs $8M
RAchip needs $80M
It's all relative with money, isn't it?
Makes for enjoyable reading, people wanting to retire on $25K/yr vs people needing north of $1M.
Which one makes you cringe?
And I was getting ready to post a new thread with a request for a "2 years to retirement checkup". Mid-6 digit portfolio and $50,000 annual expenses. I now feel like a pauper.

(especially after the NetJets discussion, I have a pilot-friend who flies for NetJets)

I believe your financial situation relates more to the norm, It seems the richer you are the more responses you get but then again on this blog you can be whoever you want to be, but who knows he could be Legit.
The difference between the high networth and the average people is the ability of the high income person to cut expenses. RAChp could cut something like 500k of expenses by getting rid of netjets and having 2 homes. That is a minimal change in lifestyle when compared to the person making 50k trying to cut to 25k. In some ways being rich is harder than being middle class in that you have to make choices. Making 50k/yr, the answer about spending 20k to send a kid to europe for a month is easy. Making 1 million/year, you actually have to think about it. On the other hand you have that extra money:) If you have never been in the rich camp, your probably don't understand the issue. And I will not pretend I understand the issues of people trying to raise a family of 4 on 20k either.

In reality all of these retirement discussions are simple. Take expenses, subtract ss and pensions, and figure out what SWR is needed to make ends meet. Get below 3% and you are safe. Get over 5%, and you don't have enough money. And in between you have to figure out how you feel about risks. Through in some adjustments for future expenses or reductions and you are pretty much there.
User avatar
HomerJ
Posts: 16035
Joined: Fri Jun 06, 2008 12:50 pm

Re: Retirement with $8M in investments

Post by HomerJ »

randomguy wrote:In reality all of these retirement discussions are simple. Take expenses, subtract ss and pensions, and figure out what SWR is needed to make ends meet. Get below 3% and you are safe. Get over 5%, and you don't have enough money. And in between you have to figure out how you feel about risks. Through in some adjustments for future expenses or reductions and you are pretty much there.
This. Great way to sum it all up in one paragraph.
LateStarter1975
Posts: 684
Joined: Tue Jul 02, 2013 4:50 pm

Re: Retirement with $8M in investments

Post by LateStarter1975 »

abuss368 wrote:Bogleheads,

This has been an interesting thread. However, I would like to ask where the original poster is? The poster has one post (this thread) to their name.

Interesting considering the question and very high volume of responses.

Makes you wonder if he wasn't just trolling for the fun of it...
Debt is dangerous...simple is beautiful
larui529
Posts: 4
Joined: Sat Nov 12, 2016 12:10 am

Re: Retirement with $8M in investments

Post by larui529 »

I am student from China. I can give you a picture of having 14M living in Shanghai.

Buy an apartment (yes, apartment, not house) near Yangzi river about 4500 square feet.

THE END.

Just kidding. I think most of people on this forum are not wealthier than you. So what answer are you trying to get from readers who look like loser to you. Be happy everyday.

Actually, you can live like a king if you have 14M in China!
RAchip
Posts: 482
Joined: Sat May 07, 2016 7:31 pm

Re: Retirement with $8M in investments

Post by RAchip »

"I totally get having 3 houses--main residence, beach house nearby and FL house, lol. I am actually surprised your housekeeper and RE tax costs are so low."

This is actually sort of the situation. Primary residence. Certainly on the higher end but many people with less money have a way more expensive house near me. Its an older house. We fixed it up a bit. We call it the Brady Bunch house because it looks like that. Its hard to find houses with 8 bedrooms these days. Then there is the house almost on the "nearby" beach (half a block back from beachfront because here it costs 5mm for 8 bedrooms on the beach but I got ours for $1.6 a half block back -- minimal view but we are right there). Then, after Sandy had the chance to get a great big house on the bay at the local beach that needed a bit of fixing. I like boating etc and some of the kids were getting older so I thought we would transition to bay house people for summers. But it didn't play out that way. The kids and wife like the beach side. So I ended up with two great houses at the nearby beach that we use all summer long. Plus I sneak out and go down there to fish when I can in spring and fall. I like having my private marina and two boat lifts, etc. The other houses at the local beach are a small condo for staff (housekeeper and babysitters) and another place nearby that was a good deal for a rental at the time but my mom was diagnosed with alzhymers so my mom and dad are using it for now while they can. And then there is the florida house (my favorite). Yes I can sell some or all but its kind of a close call because my gut says wait it out a bit.
itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: Retirement with $8M in investments

Post by itstoomuch »

^ Let us know when the kids move out and when the houses are ready for Airbnb and like.
8-)
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo
oragne lovre
Posts: 504
Joined: Tue Nov 25, 2008 3:34 pm

Re: Retirement with $8M in investments

Post by oragne lovre »

itstoomuch wrote:
oragne lovre wrote:Has anyone noticed that the OP has not responded after 3 days?
He's been replaced by RAchip. :idea:
:)
The finest, albeit the most difficult, of all human achievements is being reasonable.
Post Reply