How much do you need to retire?
South Jersey · Member since 2016 · 78 posts · 35 votes
How much do you need to retire?
Most Popular Reply
Investor · The Creek, WV · Member since 2014 · 890 posts · 1k+ votes
8yOriginally posted by @Thomas S.:
To retire at a normal retirement age you need a income of around 70% of your gross employment income.
To retire younger your passive income will need to equal your working income and you will need to continue saving for retirement.
You would need 10X your working income invested to generate sufficient income for retirement.
"I also buy all of my homes with cash so they cash flow even more."
Buying cash flow is not the same thing as investing to generate income. To efficiently use your money to generate income for retirement you must invest it. This will actually reduce the amount of money needed to retire. Buying retirement income is not a efficient use of money, it will effectively double the amount of cash required to retire.
I've tried ignoring you but you just keep at it. I don't give a crap what YOU THINK about my investment style. Goodness gracious you have to be one of the most pompous and self loathing people I have come across on this website.
If you want to leverage all your properties then go right ahead. Stop trying to tell me how wrong you think I am for buying properties with cash.
I buy cheap homes and cash flow extremely well. I don't care what you think about how I invest. Every situation is different. Most people can see/understand that. You live in some fantasy world where everyone else is wrong unless they are doing things the way Thomas does them.
149 Replies
- Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes8yTalked to a banker about this earlier this week. For someone like me, early 20s, like I said earlier around 3M. I’d probably say 4M just to be safe. It’s a staggering amount when you think of it this way.
- Investor · Grand Junction, CO · Member since 2017 · 207 posts · 201 votes8y
Originally posted by @Marcus Johnson:
Tell that to Warren Buffet and Bill Gates who have all the money in the world and continue to work.
I can assure you no one has ever said as their dying words "I wish I would have worked more".
- Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes8y
For every dollar of living expenses (which includes any taxes owed), I need two dollars of passive income to have a just-in-case margin of safety.
This passive income should be from multiple asset-class sources (interest, dividends, rents, profits, appreciation, whatever) so that if one source goes by the wayside, the remaining sources will still be able to support me. This income overall must increase faster than inflation over the long run.
I also need at least two years of living expenses in cash savings to act as a just-in-case reserve buffer.
- Investor · Grand Junction, CO · Member since 2017 · 207 posts · 201 votes8y
Originally posted by @Eric James:
I'm not against work, but it's said that on their deathbed nobody ever says "I should have spent more time working."
Funny, I missed your comment above but said practically the same thing. Can't remember where I first heard the quote.
- Investor · Saint Paul, MN · Member since 2015 · 663 posts · 512 votes8y
Again you’re looking at it completely wrong, these two figures actually enjoy what they do so you have no idea what you’re talking about
- Flipper · Washington, DC · Member since 2016 · 36 posts · 27 votes8y
Don't think I'd ever want to be literally "retired". As long as I can be self-employed for the long run, and can get my lifestyle to the type of pace discussed in 4 Hour work week then I'd be fine with that. Enough work to stay sharp and enjoy the occasional challenge with enough freedom and flexibility to spend time with family, improving on hobbies etc. would be ideal for me.
- Investor · TX · Member since 2015 · 393 posts · 290 votes8y
Originally posted by @Josh Rorie:
Don't think I'd ever want to be literally "retired". As long as I can be self-employed for the long run, and can get my lifestyle to the type of pace discussed in 4 Hour work week then I'd be fine with that. Enough work to stay sharp and enjoy the occasional challenge with enough freedom and flexibility to spend time with family, improving on hobbies etc. would be ideal for me.
That's essentially what I'm talking about.
- Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes8y
Originally posted by @Josh Rorie:
Don't think I'd ever want to be literally "retired". As long as I can be self-employed for the long run, and can get my lifestyle to the type of pace discussed in 4 Hour work week then I'd be fine with that. Enough work to stay sharp and enjoy the occasional challenge with enough freedom and flexibility to spend time with family, improving on hobbies etc. would be ideal for me.
I agree. When I become financially independent, I could afford to do whatever I wanted with my time. I decided to take up a "profitable hobby" where I got paid for having fun. That hobby had a strong resemblance to what I was doing to earn a living before I became financially independent. The difference was that before FI, I didn't have a choice; after FI, my participation was strictly voluntary.
- Rental Property Investor · Mission Viejo, CA · Member since 2014 · 230 posts · 113 votes8y
As an old dawg that is newly retired, my advice is that whatever number you come up with for your monthly needs -- DOUBLE it! It's what I call the "Old Dawg Principal!" Plan for things you can't even imagine may happen -- expenses that weren't even on your radar! You'll be much happier!
- Member since 2016 · 13k+ posts · 12k+ votes8y
"well my friends got there pretty much with everything but real estate.."
These are exactly the type of people that buy with cash and it is perfectly fine. They are not primarily seeking to invest to maximise returns but rather looking for something solid to park excess cash. They know full well there money is not being utilised to it's maximum capacity but basically need some place to put money they really have no use for.
Wealthy people can not help but make money, they do not need to be concerned about how much it makes and real estate makes a good place to park it. New investors starting out must be money wise.
Personally I don't care if someone is happy making a return equal to the prevailing mortgage interest rates but I do believe there are many uneducated new investors that do need guidance in understanding the value of money. They need to understand the difference between buying cash flow and investing for cash flow.
At my age I personal could care less since I have all I want and need, others starting out need guidance. From their they may chose a educated path to retirement.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Thomas S.:
"well my friends got there pretty much with everything but real estate.."
These are exactly the type of people that buy with cash and it is perfectly fine. They are not primarily seeking to invest to maximise returns but rather looking for something solid to park excess cash. They know full well there money is not being utilised to it's maximum capacity but basically need some place to put money they really have no use for.
Wealthy people can not help but make money, they do not need to be concerned about how much it makes and real estate makes a good place to park it. New investors starting out must be money wise.
Personally I don't care if someone is happy making a return equal to the prevailing mortgage interest rates but I do believe there are many uneducated new investors that do need guidance in understanding the value of money. They need to understand the difference between buying cash flow and investing for cash flow.
At my age I personal could care less since I have all I want and need, others starting out need guidance. From their they may chose a educated path to retirement.
Everybody's needs and wants are different.. I want a Jet do I need a Jet no.. will i buy a Jet probably not.. this is why I love to read all these folks who answer what do they need to retire or quit work.. it varies from the utlra conservative folks who can live on 4k a month to those go getters who state they need 50k a month.. I am just going on personal experiences of those who i have dealt with through a 40 year career and the family offices who invest in some of our deals.. the wealth 9 times out of 10 did not come from real estate ..
although with BP and this huge rush to real estate we are seeing post GFC i suspect that will change.. I am pretty darn proud of all these young kids in their late 20s to middle 30s who have already stacked up a bunch of real estate and rentals.. Proud of them to the max.
as they mature and age though I do believe they should start to retire debt so that at the end of the bell curve they have little debt and all plus's on their balance sheet..
- Member since 2016 · 13k+ posts · 12k+ votes8y
"I do believe they should start to retire debt"
I agree, as you approach retirement there is no problem choosing to retire debt. The less the better, ideally zero when you retire. Up to this point n my life (65) I choose to invest my equity investing outside of real estate knowing how low the returns are on real estate equity and how much more I could make with it. IF I chose I could pay off ever property tomorrow but I prefer to make more money not less. I could also sell everything tomorrow and end up with exactly the same amount of cash as if they were paid off. My numbers simply show that dead equity is not working very hard to earn it's keep. This is of course irrelevant by the time you retire if you have all you will ever need.
I do not need all the money I just hate to see it under utilised based on how hard I worked to earn it. Time for it to work for me.
- Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes8y
Originally posted by @Thomas S.:
"I do believe they should start to retire debt"
I agree, as you approach retirement there is no problem choosing to retire debt. The less the better, ideally zero when you retire.
I agree also. I've learned that it's easier to get into debt than it is to get out of debt.
If I get out of debt and then discover I should get into debt, I have an easier problem to solve than if I get into debt and then discover I should get out of debt.
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes8y
Of course everyone would like the highest return possible. What is not being explicitly mentioned is that the tradeoff is risk. The higher the debt the greater the risk. At some point, especially if one is going to quit a W2 job, decreasing risk has value.
- All Over, USA · Member since 2017 · 689 posts · 756 votes8y
Originally posted by @Dan H.:
Originally posted by @Aaron Hunt:
Need $10 million net worth.
Otherwise, need ~$25k/month of rental income. Long way to go.
Similar to my goal: $10M net worth with most of it bringing in more money (i.e. investment - The equity in the home I live in is not bringing in any income so not all parts of the $10M net worth have equal value to retirement). We are currently at greater than 5 digits cash flow/month not including investment returns from appreciation of RE or stocks.
Current plan is retire summer of 2020. Maybe start with a PCT hike (~2700 miles) with my son if I can get in good enough shape and he wants me to go (he seems to be going regardless - he will be 17 years old).
Is the 5 digit cash-flow you refer to passive or earned income?
- 8yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Originally posted by @Aaron Hunt:
Originally posted by @Dan H.:
Originally posted by @Aaron Hunt:
Need $10 million net worth.
Otherwise, need ~$25k/month of rental income. Long way to go.
Similar to my goal: $10M net worth with most of it bringing in more money (i.e. investment - The equity in the home I live in is not bringing in any income so not all parts of the $10M net worth have equal value to retirement). We are currently at greater than 5 digits cash flow/month not including investment returns from appreciation of RE or stocks.
Current plan is retire summer of 2020. Maybe start with a PCT hike (~2700 miles) with my son if I can get in good enough shape and he wants me to go (he seems to be going regardless - he will be 17 years old).
Is the 5 digit cash-flow you refer to passive or earned income?
Is RE investing really passive? But of the two choices it is passive income: rent - expenses including cap ex estimate. It is the regular monthly cash flow. On occasion we have sweat equity opportunity but that is more irregular. We have never did a flip and have only sold a couple investment properties (not flips: one was because assets needed to be deployed elsewhere (bigger and better investment: our best RE investment yet) and the other was an OOS that was too much work for its return).
We are considering a purchase that would be our largest sweat equity purchase yet. Lots to consider. I may create a thread on this one if we proceed. We would partner with another BP member (at this time I am not indicating who but if I proceed and create the thread I will see if he wants to be named) and leverage both of our expertise. So we would need to work out details there also. Kind of excited about the prospect and for the first time in a long time on an RE purchase a little bit afraid (size, scope, cost, risk, etc.). Definitely some new domains for us but that is why we would be partnering (as well as our time is limited and the partner just recently quit his W2 job (taking sabbatical) - he indicated he would hand off one of his current RE projects to support this one). Lots to work out in the next day or two.
- Investor · TX · Member since 2015 · 393 posts · 290 votes8y
Originally posted by @Marcus Johnson:
Again you’re looking at it completely wrong, these two figures actually enjoy what they do so you have no idea what you’re talking about
Maybe. Maybe not. Neither of them are on their deathbeds looking back at their lives. For me, I can't imagine wishing I had made one more deal over wishing I had spent more time with my family or wishing I had seen Kilimanjaro.
- All Over, USA · Member since 2017 · 689 posts · 756 votes8y
Originally posted by @Roger S.:
Originally posted by @Marcus Johnson:
Again you’re looking at it completely wrong, these two figures actually enjoy what they do so you have no idea what you’re talking about
Maybe. Maybe not. Neither of them are on their deathbeds looking back at their lives. For me, I can't imagine wishing I had made one more deal over wishing I had spent more time with my family or wishing I had seen Kilimanjaro.
My Dad climbed it a couple years ago. I really don’t get the hype behind it or any random mountain for that matter. Spent more time with family...for sure.
- All Over, USA · Member since 2017 · 689 posts · 756 votes8y
Originally posted by @Dan H.:
Originally posted by @Aaron Hunt:
Originally posted by @Dan H.:
Originally posted by @Aaron Hunt:
Need $10 million net worth.
Otherwise, need ~$25k/month of rental income. Long way to go.
Similar to my goal: $10M net worth with most of it bringing in more money (i.e. investment - The equity in the home I live in is not bringing in any income so not all parts of the $10M net worth have equal value to retirement). We are currently at greater than 5 digits cash flow/month not including investment returns from appreciation of RE or stocks.
Current plan is retire summer of 2020. Maybe start with a PCT hike (~2700 miles) with my son if I can get in good enough shape and he wants me to go (he seems to be going regardless - he will be 17 years old).
Is the 5 digit cash-flow you refer to passive or earned income?
Is RE investing really passive? But of the two choices it is passive income: rent - expenses including cap ex estimate. It is the regular monthly cash flow. On occasion we have sweat equity opportunity but that is more irregular. We have never did a flip and have only sold a couple investment properties (not flips: one was because assets needed to be deployed elsewhere (bigger and better investment: our best RE investment yet) and the other was an OOS that was too much work for its return).
We are considering a purchase that would be our largest sweat equity purchase yet. Lots to consider. I may create a thread on this one if we proceed. We would partner with another BP member (at this time I am not indicating who but if I proceed and create the thread I will see if he wants to be named) and leverage both of our expertise. So we would need to work out details there also. Kind of excited about the prospect and for the first time in a long time on an RE purchase a little bit afraid (size, scope, cost, risk, etc.). Definitely some new domains for us but that is why we would be partnering (as well as our time is limited and the partner just recently quit his W2 job (taking sabbatical) - he indicated he would hand off one of his current RE projects to support this one). Lots to work out in the next day or two.
Good luck!
- Investor · TX · Member since 2015 · 393 posts · 290 votes8y
Originally posted by @Aaron Hunt:
Originally posted by @Roger S.:
Originally posted by @Marcus Johnson:
Again you’re looking at it completely wrong, these two figures actually enjoy what they do so you have no idea what you’re talking about
Maybe. Maybe not. Neither of them are on their deathbeds looking back at their lives. For me, I can't imagine wishing I had made one more deal over wishing I had spent more time with my family or wishing I had seen Kilimanjaro.
My Dad climbed it a couple years ago. I really don’t get the hype behind it or any random mountain for that matter. Spent more time with family...for sure.
It was just an example, could have just as easily been the Eifel Tower.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes8y
Originally posted by @Marcus Johnson:
Again you’re looking at it completely wrong, these two figures actually enjoy what they do so you have no idea what you’re talking about
Bill Gates is basically retired and spends all his time giving away his money. He travels the world with his wife and kids doing that. Warren Buffet is very grounded in family. He lives in the same house he purchased in 1958! Warren Buffet said last year an interview he would be content making $100,000 per year.
On the flip side there is a long list of business owners, entertainment moguls and executives who are wildly successful in their career and have a broken personal life. Many have had multiple marriages and their kids grew up never seeing them. Everyone shows up at their death bed to collect their inheritance, not to pay tribute.
I would argue more often then not, people who are obsessed with their success, end up with broken family relationships. It is something I am very aware of in the actions I take. You only have 24 hours in a day and what you spend your time doing is where your results come from. Focus on business and it grows. Focus on family and it thrives. Focus on fitness and you are healthy. How you allot your time is the key to happiness.
Regardless of how much someone is obsessed with work, NOBODY on their death bed wishes they had worked more.
- Real Estate Investor · Unadilla NY · Member since 2017 · 418 posts · 297 votes5y
So I'm curious two years later how everyone is making out reaching their goals? My personal goal is 10k a month net which in my opinion is more than enough to retire. I don't have to drive a lexus or a range rover to be happy.
- Specialist · Santa Ana, CA · Member since 2020 · 25 posts · 16 votes5y
Originally posted by @Dan M.:
So I'm curious two years later how everyone is making out reaching their goals? My personal goal is 10k a month net which in my opinion is more than enough to retire. I don't have to drive a lexus or a range rover to be happy.
I have to agree with you on that one. But if you read multiple books about happiness psychology, increasing comforts and luxuries don't increase your quality of life (it can be a burden sometimes). But if you wanted to know about my real estate investing career, I haven't even started and I likely won't until a while.
- 3yEddy OgbekhiluPro MemberInvestor · Lutz Florida . · Member since 2018 · 103 posts · 34 votesThats absolutely my goal,3 yrs in the making an ADU being built to serve as my abode whenever am back in town.
Quote from @Michael N.:
Is anyone else planning to retire overseas to dramatically reduce expenses without sacrificing lifestyle? 2-3k/month will go very far in some places.
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