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[LordBucket]

For most of the developed world 100k is honestly rather a small amount to live out the rest of your life on.

I actually know someone who tried to retire on $300k and $1200/month passive income from rental property. She burned through the 300k in I think it was 7 years.

Thing is, though...that even the 100k which most seem to agree isn't enough...is a lot more than most people have. For example, according to this article, the median net worth of an entire US household was only $65,900 in 2012. Playing around with this, median net worth for americans age 30 is only $8500, and age 40 is only $51,000. Even at the upper range of the chart, at "65+" it's only $232,000.

I think passive income from something like a rental property is probably the way to go. But to some extent that's a zero-sum game. For every person with a rental property, somebody else has to have an income to be making rental payments.

You've got 4 years of minimum-wage income. So you've got about 1 year of living well, 3 years of living comfortably, or 4 years of worrying about making the money last.

That's not entirely true. I think a significant portion of income for most people is spent on supporting the working lifestyle. For example, living in a small town without a job...you wouldn't really need a car. Car payments plus insurance and gas is easily $500/month you wouldn't need to be paying.

If it were...hypothetically, $200k instead of $100k, there are places even in the US where you can buy houses for $80k. Buy a house, lose the car, have hobbies like playing computer games or writing books...yeah, even $200k doesn't seem like enough. But that's more than the vast majority of people have.

Wasn't intending this to be a "haves vs have nots" thread, but $100,000 is not a trivial amount of money. I know people with as much s $140k/yr income who still wouldn't have that much cash if they liquidated as described in the OP.

If I had 100k I'd keep working.

Ok, but let's be realistic. How long would it take someone to set side that 100k? If you're say...30, and have $100k, you're way ahead of the game. Again, according to this the median 30 year old only has a net worth of about $8500. So let's say you go back to work for another ten years. Just picking arbitrary averages from google of 8.6% market RoI and 3.4% inflation for a net 5.2% positive annual interest (I know we've had investment discussions in other threads, but just humor the ballpark numbers for now) and let's say you manage to set aside $500/month while you're working.

Putting that into a compound interest calculator, after ten years of working, you add an extra $78,000 to your total. Or, if you invest the initial $100k too, that puts you at a net $246,000 after ten years. Yes...we all understand how compound interest works...but casually saying "hey, just work for ten more years...no wait, $246k isn't enough either, you probably need to work for 20 more years," ....this is not a trivial proposition. And regardless of savings/investment strategies, how many people are setting aside $500/month in the first place? I don't think many are.

[Leafsnail]

You can't live on $100k worth of rental property unless maybe you bought at an opportune moment before a property boom.  The highest rental yield you can reasonably get is around 8% (even that would be pretty tough to find, really), so at best you're looking at around $8000 a year of income before tax, which is well below the poverty line.

[LordBucket]

buy a small house on the gulf of mexico, somewhere far away from the tourist
towns. Believe me, nothing could beat that.

This is the kind of thing I was thinking. There are places in the US where 80k will buy you a decent house, and I've personally bought vacant lots in developed areas for only a couple thousand an acre. Presumably that's possible elsewhere too.

It's very attractive to think that there are parts of the world where the US dollar simply goes farther than it does here, and I've heard anecdotes from people about going barhopping in third world countries, buying drinks for a nickel and telling the wait staff to keep the change. But it's been a long time since I've heard anyone make that claim, and I suspect that it's probably not realistic anymore.

Buying a $5,000 shack on an island somewhere and spending one's evenings sipping martinis surrounded by sexy island babes in an economy where 5 cents an hour is a decent wage due to currency imbalance...that wouldn't be so bad.

[XXSockXX]

Where I live you couldn't retire with 100, 000$. That's what, like 75,000 euro? You might be able to buy a shitty old house with that, but would go bankrupt immediately because of necessary repairs and monthly expenses, like tax, energy, water, heating and maybe eating something once in a while.
You might be able to "retire now" with 1mio Euro, that might give you enough income through interest rates. Still, if I have no income, the government will pay my rent + 450eur monthly. I could live on that (might be less if I refuse shitty job offers).

It's very attractive to think that there are parts of the world where the US dollar simply goes farther than it does here, and I've heard anecdotes from people about going barhopping in third world countries, buying drinks for a nickel and telling the wait staff to keep the change. But it's been a long time since I've heard anyone make that claim, and I suspect that it's probably not realistic anymore.

I know a guy who emigrated to Paraguay, opened a bar and bragged how he lived like a king with like 1000eur per half-year. Turned out he was his own best customer (he is a bit of a massive alcoholic), took loans from some dubious people and had to return to not get killed. Got a paraguayan wife out of it though, so maybe it was worth it.

[Vector]

Definitely keep working.  I'm not going to retire at 23 >_>

[misko27]

Hypothetical scenario: you quit your job, liquidate all assets and pay off all debts. You sell your house and car, you cancel all your credit cards and generally tie up all loose ends. After everything is said and done you have only $100,000 in cash and a current passport. You have no children, you're unmarried, and you have no particular emotional attachment to staying in the US. You're intelligent and in good health, but you're kind of lazy and you only speak english.

You want to retire somewhere where you can live a life of ease and hedonism. Can be anywhere in the world. Immediate survival is not an issue. You can take a couple months if you want, to research and decide how best to proceed.

Other then that this is me. I have no money, no job, no debts, no car, passport, house, creditcards... A student, so to speak. Other then that that fits me well enough.


Ease? I lean towards some place with few taxes, low cost of living rather comfortably, so therefore some poor country, etc.


100,000 would not last me long, even assuming I scrounge bottom of the barrel. At 16, I have approximately 63 years to live on 100,000 dollars. That is $1587.30 a year. Not alot, even by poor country standards, but I might, conceivably make it.

[Max White]

100K?
Go to centerlink, live on the doll.

[mainiac]

Buying a $5,000 shack on an island somewhere and spending one's evenings sipping martinis surrounded by sexy island babes in an economy where 5 cents an hour is a decent wage due to currency imbalance...that wouldn't be so bad.

International organizations consider under $2 a day to be poverty and under $1 a day to be dire poverty so no, there is nowhere that 5 cents an hour is considered a decent wage.  That's a wage that it would be hard to survive on anywhere.

Back in the 90s the dollar appreciated a decent amount, driven by currency depreciations in what were by far our largest trade partners, Canada and Mexico.  Canada had strong budget austerity compensated for by an export boom to the US while Mexico had a banking crisis that forced them abandon their currency and renounce debts, causing a huge depreciation.  On top of those NAFTA reduced trade barriers.  Seeing as they were the bulk of our trade back then (China now slightly edges out Mexico for second place), the meme of the "strong dollar" took on outsized importance in people's minds.  But while there was an underlying truth to the meme, the popular perception really blows things out of proportion.  Cheap Canadian natural resources didn't mean you could live like a mogul in south america on 100k, even though that 100k would last a bit longer.

You could probably retire on 100k somewhere with a low standard of living if you don't mind being pretty poor.  But I wouldn't recommend it from a standard of living standpoint.  Frankly I'd rather have 0 in the bank and be working minimum wage in the first world then living as a retiree in India or Guatamala on 100k.

[LordBucket]

Ok. So let's expand the scope of the discussion then:

How much money would need? Where would go, and what would you do?

[mainiac]

How much money would need? Where would go, and what would you do?

http://www.mrmoneymustache.com/

[Tarqiup Inua]

Get copper bar or two, wooden training axe, booze, bit of food, wooden wagon, something to drag it, few stone blocks and six buddies to do all the work for me.

Then we'd set off to mountains, tame dragons and sell them to the highest bidder.

[Scelly9]

Buy a pistol, a switchblade, a backpack, some clothes, and find a friend. Invest $75,000 with a good broker. Train hop across America. When I get bored of that, play darts with a international airport flight list.

[Frumple]

If it were...hypothetically, $200k instead of $100k, there are places even in the US where you can buy houses for $80k. Buy a house, lose the car, have hobbies like playing computer games or writing books...yeah, even $200k doesn't seem like enough. But that's more than the vast majority of people have.

For what it's worth, the house I'm living in right now (three bedroom, one bath, alright back yard) is within fairly comfortable walking or definitely comfortable biking distance from one of the world-reknowned beaches in the states. Cost the owner $30k for the house and the lot it's on, plus maybe another four or five thousand in refurbishing and whatnot. Could use a few hundred more in varying touchups, but it's a pretty decent joint. If you're not aiming too high and you find the right seller, it can get relatively cheap.

Wouldn't personally retire here, because Florida is fucking miserable to live in, but if that's the thing you're looking for it can get pretty low. $100k isn't much to retire on at my age, though. It'd be a helluva help, and I'm fairly comfortable in saying I could probably stretch it for a decade or two (providing I end up inheriting at least one of the family's properties, anyway ), but not three or four. Now, enough of a nest egg to comfortably live off part time instead of full employment for a long damn time? Yeah, that it would be.

Which, with 100k flat, is probably what I'd do. Go somewhere colder that has seasons, find a comfortable part-time doing something more useful than retail, and do that for the next few dozen years. Honestly, with a slush fund to that degree, working for a relative pittance for something that's actually societally beneficial would be a lot more viable... and I'd rather be doing that than just bumming around. I mean, I like bumming around, and I'm really good at it, but being able to support myself while doing something helpful would be considerably more... life affirming, I suppose? Like with a lot of things, I don't mind working, I just don't want to have to work, ha, and working for most businesses is somewhat, hrn. Call it ethically troubling, yeah.

Ok. So let's expand the scope of the discussion then:

How much money would need? Where would go, and what would you do?

To this, hum. Give me... let's say 9.6k/year (figure 200/mo food [I actually eat about half that, but that's what food stamps pay out so it's a good baseline], triple that for everything else, almost definitely overestimating). No, halve that -- 4.8k/year, room, board, utilities, etc. Almost certainly (still) overstating, but still. I'd probably be able to make it another 50 years without too much trouble, so... 240k. Plus enough to buy a little land and housing... eyeball it at maybe 50-60k on the outside, so 300k total. M'not sure how taxes and whatnot would interact with overall budget, so overestimating a bit is likely a good idea, so say somewhere between that and 350k.

I'd go somewhere colder, away from this bigot-infested hellswamp. Washington's always been tempting (at least the coastal/near city stuff), but I'd shop around, I'm not terribly picky so long as the weather's more sane. Spend said 50 or so years playing, reading, and doing volunteer work for something particularly useful... I'd love to help out with research or whatev', but anything education related would likely be invigorating. I wouldn't have much trouble living the rest of my life like that.

[XXSockXX]

Since "Who wants to be a millionaire" is still a thing here, I have heard that 1 million euro could work. Presuming you still get a decent interest rate (which seems unlikely at the moment, interest rates are way down), you could afford an apartment and do nothing all day.

I guess I'd be cool with more or less staying where I am, just hanging out with people, consuming books and music, making music, doing creative stuff, travel a bit through Europe and maintaining comfortable intoxication levels. I might need around 2000 eur per month to pull that off in low-level decadence. I could do with half of that, but then it wouldn't be fun anymore.

[LordBucket]

How much money would need? Where would go, and what would you do?

http://www.mrmoneymustache.com/

I'm not looking for personal advice. I'm trying to have a discussion.

For example, I have a friend who's involved with the RNC. He told me once that if he didn't have all his responsibilities, if he wasn't married, if he could just cut loose and run and do his own thing free of any obligations...he'd go be a beach bum. Live on the beach, swim and suntan every day, hit on younger girls, and live off of cheap beer and hot dogs.

It doesn't take much money to live that kind of lifestyle. And if you trade in the cheap beers for margaritas and sleeping on the beach for a nice bed, I think you're pretty much describing the average pacific island vacation. Me personally, I don't really need to be waited on. If the difference between going to a $2000/week resort and renting a $500/month apartment in the same town is that at in the apartment I have to mix my own drinks and do my own laundry...that seems like a pretty good trade to me. Here's a house in Hawaii for $60k that's a mile and a half from the beach. Is it small? Sure. Is it old? yes. Maybe 100k isn't enough. Is 200k enough? Would giving up a car and living on a couple hundred dollars a month in a tropical island paradise be worth not having to spend an extra 30-40 years of your life working? I can see some people thinking that yeah...that would be a pretty good deal.

What do you want to do when you retire? What would it take for you to live a "I no longer work now, I enjoy myself" lifestyle?