chinto wrote: ↑
Tue Aug 15, 2017 12:05 pm
Well, I'll dispute some of what you wrote. I started down this route in 1994...I hit the 62.5 times not too long ago 2015-2106...my income has been 2x the median for a college graduate, but given my woman does not work outside the home, that makes us just average. The only reason I am still working is because health care is so precarious right now. It put my expense numbers in question but I also think the current required premiums are not sustainable.
I think I am decisively average and the results can be average also. It is a matter of spending discipline relative to yearly investment.
I do think you need to be a multi millionaire to retire and your 3 millions and 50k figures are spot on and readily achievable. Heck I pulled it off in 21 years.
For years I have told people having a million dollars mean you can afford to spend 16-18K a year into perpetuity. So being a millionaire is not all people think it is. It really is a low target.
I think your average person can save 2.5 - 3 million through spending discipline and investment methodology. From what I have seen I think anything over 5 million means extreme austerity or a need for a relatively high income.
I am not sure if you caught I am planning for a 50 year time horizon.
I just think your perspective does not accurately reflect reality. You don't have to be a multi-millionaire to retire. $3M is overkill for 50k in annual spending, even over 50 years. The vast majority of people currently living in the richest, developed countries on earth will never be millionaires. The vast majority of people currently living in the richest, developed countries on earth will however eventually find a way to retire. You have been wildly successful. That doesn't not mean the average person can duplicate your success in building wealth. Only a small subset of the population is capable of that.
I also feel compelled to say I think it's a very bad idea for you tell people:
"For years I have told people having a million dollars mean you can afford to spend 16-18K a year into perpetuity. So being a millionaire is not all people think it is. It really is a low target.
I think your average person can save 2.5 - 3 million through spending discipline and investment methodology."
That information is entirely your opinion and not supported by any objective facts or academic research. If you have anything to support that, please share it. People should save diligently, invest prudently, and adjust their expectations to reality after they see how their results played out. That's the whole point of bogleheads, to teach and discuss the most prudent ways to invest based on facts and research (at least that's how I view it). You never know how much a portfolio can support in terms of withdrawals going forward in perpetuity because we don't know the future. But for a reasonable, low cost, global portfolio of stocks and bonds to support only a 1.6% withdrawal rate in perpetuity the future would have to be SIGNIFICANTLY worse than anything we've observed in modern financial history. Like SIGNIFICANTLY worse than the great depression, WWI, WWII, the tech bust, the financial crisis, etc. That is limiting your spending to roughly half and/or working for an extra decade in order to reduce the chances of portfolio failure a few basis points. And even then, you haven't moved the chances to 0. That is some awfully expensive insurance.