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How much money do you need to retire and why you probably wouldn’t.
THREAD:
THREAD:
I can imagine it being annoying when a rich person tells you “money doesn’t buy happiness”
So let me explain what we mean when we say that:
It’s not that no money doesn’t make us happy, because if I had to worry about bills & couldn’t be free from bullshit, I’d be unhappy.
So let me explain what we mean when we say that:
It’s not that no money doesn’t make us happy, because if I had to worry about bills & couldn’t be free from bullshit, I’d be unhappy.
So what we actually mean is that EXCESS money doesn’t make you happy.
For most, this is around ($2MM) - depending on where you live & desires, it could be more or less.
But in general, $2MM-5MM liquid is optimal number.
Let’s run some numbers to make it clearer:
For most, this is around ($2MM) - depending on where you live & desires, it could be more or less.
But in general, $2MM-5MM liquid is optimal number.
Let’s run some numbers to make it clearer:
$5,000,000 liquid net worth.
Let’s assume a very conservative 5% ARR across your entire portfolio if well diversified.
5% of 5MM = $250K.
Minus 20% CG tax on $250K = $200k net to spend per year which is already more than enough meaning you can reinvest the spare $ to compound.
Let’s assume a very conservative 5% ARR across your entire portfolio if well diversified.
5% of 5MM = $250K.
Minus 20% CG tax on $250K = $200k net to spend per year which is already more than enough meaning you can reinvest the spare $ to compound.
A well diversified portfolio may look like:
~5% cash.
~5% gold.
~10% bitcoin.
~40% equities (e.g. ETFs, indexes, gov bonds, low yield dividend paying stocks).
~40% Real Estate.
*Change numbers depending on risk tolerance & knowledge of industry.
~5% cash.
~5% gold.
~10% bitcoin.
~40% equities (e.g. ETFs, indexes, gov bonds, low yield dividend paying stocks).
~40% Real Estate.
*Change numbers depending on risk tolerance & knowledge of industry.
So why not more than the number I said, surely more is better right?
No, money has diminishing returns.
After the point of freedom, the rest becomes a crutch (paranoia to keep the money, increased stresses such as having to fire staff at scale, threats to privacy, lawsuits etc)
No, money has diminishing returns.
After the point of freedom, the rest becomes a crutch (paranoia to keep the money, increased stresses such as having to fire staff at scale, threats to privacy, lawsuits etc)
There’s two ways to use money:
1 - To disappear: keep it lowkey & enjoying the fruits of your labour with those who love you.
Anonymously use your money as an instrument of change.
A quiet & peaceful life.
1 - To disappear: keep it lowkey & enjoying the fruits of your labour with those who love you.
Anonymously use your money as an instrument of change.
A quiet & peaceful life.
2 - To be seen by the world:
Fill the gaping hole inside you with temporary hits of pleasure so that the world can see how “successful” you are.
Unfortunately these hits of pleasure are like placing a bandage over a wound without treating the root cause.
Fill the gaping hole inside you with temporary hits of pleasure so that the world can see how “successful” you are.
Unfortunately these hits of pleasure are like placing a bandage over a wound without treating the root cause.
After you hit that freedom number, you’ll experience a shift from chasing numbers, to chasing mastery, pursuing a passion & creating change.
That is the only reason why UHNWI usually keep building something after they are free - because “retirement” gets boring.
That is the only reason why UHNWI usually keep building something after they are free - because “retirement” gets boring.
Not all money is created equal.
You want to get to the point where your income is made passively on your networth.
Two guys:
1 - MD making $500k/pa.
Unlimited stress.
2 - Dude worth $8MM, making $500k/pa on his networth through his investments.
Not the same lives.
You want to get to the point where your income is made passively on your networth.
Two guys:
1 - MD making $500k/pa.
Unlimited stress.
2 - Dude worth $8MM, making $500k/pa on his networth through his investments.
Not the same lives.
Funny how everyone that wants to be a “billionaire” doesn’t even have $10MM lol.
Get clear with your goals to an exact science(actually factoring in taxes) & then reverse engineer it.
There are millions of ways to the top of the $ mountain, most will include owning equity.
Get clear with your goals to an exact science(actually factoring in taxes) & then reverse engineer it.
There are millions of ways to the top of the $ mountain, most will include owning equity.
1 - Make $2MM+ liquid by grinding for a decade on biz
2 - Invest at 7% - live off passive investments, don’t become hedonistic pig & have ultimate freedom
At this point you’ll have the choice to stop doing anything for money and can only “work” again if you LOVE it.
2 - Invest at 7% - live off passive investments, don’t become hedonistic pig & have ultimate freedom
At this point you’ll have the choice to stop doing anything for money and can only “work” again if you LOVE it.
As requested by brothers @DejaRu22 @thedulab @kobegatsby 
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