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Comment by gaius | Hacker News Reader

After projecting their monthly cost of living, the Rooses determined they’d need $300,000 in investments to be able to live off the dividends

This number seems impossibly low to me. At an - optimistic - 5% return that’s $15k/year between 2 people without allowing for inflation eroding the capital. A lifestyle of traveling means buying airline tickets etc even if they stick to locations with a very low cost of living. And presumably one day they would want to return to the West.

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The "standard" advice is the 4%-rule -- the idea that you can withdraw an inflation-adjusted 4% of your original portfolio in perpetuity. 5% is aggressive and has failed historically. They're probably looking at $12k/year spending for two people. If you want to move to live on this much, you have to live like a local, and it might not be super pleasant.

Indeed. If you are going to do this then your capital has two jobs, it has to support you while you travel, and it has to bootstrap you back into Western life when you return (such as covering rent/deposit on a mortgage etc etc while you job hunt). Three jobs in fact as it has to give you a buffer for emergencies, if you have a health situation or need a quick repatriation for any reason. Traveling means not living like a local in a poor country, because the locals aren't hopping on a plane at the drop of a hat, they live where they live and are pretty much stuck there. And you won't be having much fun if you have money worries hanging over your head!

Without thinking about it especially much I'd guess you'd want at least a mil in capital to pull this off, perfectly possible to achieve living a frugal lifestyle while working in Big Tech for 10 years - if you could bear it for that long.

One thing people forget is the mental overload of making $150-200k a year but spending 20-25% of that. Yes, initially if you've never saved or had money before it feels good to sock away $4k+ out of each paycheck. But eventually when you look at your bank account and see tens or hundreds of thousands of dollars you start wonder why you can't just go have that $100 dessert you saw on YouTube.

Living like a pauper for ten years while having to get multiple bank accounts to handle FDIC coverage is harder than it sounds.

I’d imagine your main savings vehicle would be Vanguard funds with dividends reinvested, try to get benefits of compounding as early as possible. But you are right the psychological overhead of being the only one of your friends to miss out on everything would take a huge toll.

These people aren't keeping hundreds of thousands of dollars in cash. It's all in low-fee index funds.

That's why it is important to still have disposable income after your expenses are taken care of. But the more important item, is general life stress. A lot of stress situations can be made to go away if you throw money at it (things like a constantly-breaking car, or living in a high crime area, or general boredom). That is the main reason that people have a hard time saving at almost any income level (until you hit over 70 - 85K).

300k sounds really low. Unless they have a free and clear home with low property taxes.

For example I lived on 900 USD a month (saving over 90% if my income) for a couple years. I can’t imagine two people living off just 300k, unless it’s, again, a free and clear rental property that they manage themselves.

If you're willing to travel much slower you don't have to buy plane tickets; trains are much cheaper in most parts of the world. If they did base the number on their current expenses, presumably they'll be fine with the kind of lifestyle they'll be able to afford. Of course they'll need to get back to work if they ever want to increase their spending, but that doesn't really leave them worse off.

That's way to low even if you magically own your own home v unlikely in CA. Even if you have an inherited home back in Oz its way to low.

You'd need around a £million to maintain a decent but not rich life style.

To give an example I have about $200k invested 70% in stocks and am yielding about $5k in income (which is reinvested in the moment). Ok I am not optimising for income over growth but no way could I live well on just that.

Living off $12k is not in any realm of "impossible" in a first world country. It may come as a surprise (halfly sorry for the snark), but most of the world (60%) lives under less than $1800/yr. The dreadfulness and despair of it goes away when it's a personal choice to live frugally.

There's a lot of things you can get for free or dirt cheap, when you choose to see the deals.

But they are not paying First World prices for anything. $12k/year between two people, owning no other assets than their $300k capital is not really do-able in the West. You could if you already owned 40 acres and were mainly self-sufficient.

I believe 13% of people+families survive under $12k/year in the U.S, i.e poverty. Stretching $7k with one person living in a city, is by no means impossible. Extremely uncomfortable by what you may have become accustomed to? Of course.

You can buy a day's meal at Walmart for $2. You can also couch surf indefinitely. And repair all of your current possessions, instead of replacing them. Such as clothes and electronics. There is a world of possibility.

You can buy a day's meal at Walmart for $2.

There is a misguided individual here in the UK called Jamie Oliver who says things like that... It's true if you have the money upfront to buy in bulk. And somewhere to store it all, somewhere clean and dry, and a freezer. And a kitchen, and energy to boil water and run the oven. And know how to cook and have the time to do it (easy if you are "retired", not so much if you are working several minimum wage jobs). Etc, etc, etc.

I could spend very little on actual ingredients and have tasty, nutritious food every day, because everything else is taken care of. But I would never be so facile as to extrapolate that to someone without all the prerequisites that make it possible.

They're usually receiving significant government benefits in terms of healthcare, rental, and food subsidies. They're earning $12K/year, but certainly not living on that.

With £200k in liquid assets in the U.K. you would be unlikely to qualify for many benefits - especially if you had chosen to quit your job for no particular reason.

the reason doesn't matter for the DHSS

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