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Comment by CalRobert | Hacker News Reader

Am I weird? I spent a year living somewhat frugally (still enjoyed myself, still took a trip now and then) in San Diego and spent about 20,000. That was only my share tbf, my wife covered her half of expenses. We had a flat in a nice neighbourhood, shared an old but decent-condition car, took one trip to New England that year..

We had obamacare which helped a lot.

I see people on HN talking about needing massive amounts of money to live and I just wonder where it all goes? What's it for?

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The massive amount of money basically sits in an investment account and generates dividends to live off of. That's what people are talking about. In order to have a salary they're used to they need like 20-30x the cash in the bank to generate it (preferably a bit extra to keep up with inflation too). Otherwise if you weren't using it to do that presumably you'd eventually run out of money and have to go back to work (except now you're old and 30 years out of date)

Yes. What has become clear to me in this discussion is that some people, when talking about being "comfortable", are talking about maintaining a much more lavish lifestyle, funded by passive income, than many people like myself, are used to or feel that they need. For many, comfort is simply feeling like they aren't at risk of starving or becoming homeless. That's the definition I'm working with, but it's clear to me that others are talking about something different, as you have articulated in your comment. Thank you.

I think one of the disconnections here is that you are talking about extra cash (over what you currently earn), whereas rgbrenner (and probably others) are talking about all income.

And I think they have a point: $100k is a lot of money, but what if you got sick and couldn't work anymore, ever? Wouldn't you be at the risk of starving or becoming homeless if you had to stretch that over 30 or 40 years?

> I think one of the disconnections here is that you are talking about extra cash (over what you currently earn), whereas rgbrenner (and probably others) are talking about all income.

Agreed.

> And I think they have a point: $100k is a lot of money, but what if you got sick and couldn't work anymore, ever?

That's a fair point. I don't really worry too much about getting sick and never being able to work again ever. I think some of this comes down to the level of risk that each individual is content to live with. If I had children or a family, perhaps I would be a lot more worried.

Oh I know, but it seems like I encounter a mindset here that you need six figures forever just to not be destitute. A few days ago a guy posted he had eight million post-tax from an exit and folks were calling it barely enough to retire. Even if you could only keep up with inflation that ought to last 150+ years. Particularly with a paid off house.

> In order to have a salary they're used to

Well there's the problem right there. Your salary should be higher than your cost of living because you're actively trying to save for retirement. Once you're actually retired you shouldn't need as much.

The massive amount of money is just to generate investment income so that you don't spend down the principal. People often use 4% as a safe withdrawal rate, but it's much safer to use 3.5% or 3%.

For example, if you wanted to spend $20k per year, then you would need $20,000 / 0.03 = $666,666 invested in index funds.

I'd be happy with something like $40k per year ($1,333,333 invested), or just a SaaS service that provides passive income. Running a business is far riskier, but it also gives you something to do.

And maybe I wouldn't mind having a nice house in an expensive city like New York, Melbourne, Vancouver, etc. $20,000 per year would be nice, but I think $200,000 would be pretty nice as well.

Retirement, buying a home in the bay area, saving for kids college funds.

You're right, spending 40k for a couple is plenty to live on. It's all of the above that sucks up the rest if you want to retire (let alone retire early).

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