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Comment by bengl3rt | Hacker News Reader

If you want to live like a 20-something for the rest of your life, sure. Your cost structure changes as you get older and have things like houses, spouses, cars, and children.

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Do you have a house or kids? I do. The near-certainty that I could afford college, house payments, and a humane retirement would be an intense motivator for me. I'm not conservative by any means --- I work for a company I cofounded --- but I think it's easy to forget that adults like us live with a pretty fucking high cortisol load.

$6MM invested with a 6% return provides a $360k pa lifestyle just living off the interest. That seems like quite enough for houses, spouses (well—maybe spouse; alimony could eat into that quite a bit), cars, and children.

Zero risk return is way below 6% right now. I'm not sure where you're going to find anything like that.

Berkshire Hathaway is willing to guarantee you a $205,000 annual income from that sum in an annuity, which is not a bad deal at all, but it's not 'never worry about money again', it's just a really nice salary, and would be substantially depleted in the case of any inflation at all.

No need to go zero risk when the investment starts in your 20s. But of course, yes, inflation. But of course, you can draw from principal as well—that's how retirement funds usually work.

I'll put it another way: Maybe it's not 'never worry about money again'—people are prone to worrying, after all—but $6MM is more than the lifetime earnings of the vast majority of Americans.

If you can't make it on more than what nearly everyone else will ever see in their entire lives, that's your problem.

Right now 10-year T-Bills are pulling about 1.65, and inflation is having a nice bounce between 1.7 and 3. Let's even it out at 2 - either way, yes, you're losing money on ultra-low-risk investments. All you can hope for is to reduce the wages of inflation on your balance sheet.

BH annuity is not a bad deal, but losing 2% of your income a year will sound tolerable until about year 5... =)

If you retire mid-twenties on $5M, there's no way you'd make it through 70 on that, if you did nothing else active (read: risky) to increase your income.

You want to spend 50 years on vacation?

I said nothing of the sort.

Follow the thread UP, and you'll see it's the core of the conversation - as to whether one can live off of 6MM for the rest of your life. I call "ceasing working and living on the money you made previously" retirement, you can call it what you like.

Let's assume your investments keep up with inflation but no more, which is very easy to do. Then essentially you are just living off of your principle. 5MM goes a long ways. 75k a year (in today's dollars) will last you 67 years. That's more than most people make. I'd take that.

A mixed portfolio can provide both a solid annual income and a hedge against inflation. $6M well-invested in your 20s means you don't have to worry about money again.

Earlier in the year, you could get a 12 month CD in Australia for almost 6%.

The inflation rate in Australia was pushing 4% last year. That's a nominal return of 2.X%.

It's a real return of ~2%, it's a nominal return of 6%. "Nominal" in this case means "in name only" - it's the face-value of the return, not the actual value.

If a guaranteed six-figure passive income is not "never worry about money again", I don't know what is.

You'd have to worry about inflation. It can quickly turn that six-figure income into a low five-figure income in today's dollars.

Suppose someone said that to you in 1975, and you'd put your money into something that didn't adjust for inflation.

You'd be 37 years older and making less than 1/4 of the income, adjusted for inflation.

Nope, you can do it with $500k in a Colorado suburb for example. This guy is a living example of it, with multiple kids, multiple cars, a house, furniture, etc:

http://www.mrmoneymustache.com/

Most people will never make $6M in their lifetime. The average college graduate will make less than $3M when it is all said and done.

If you can earn more, great. But the chances are exceedingly low to begin with.

Bullshit. I live on roughly $18k a year net. buy a house, maybe doubles or PERHAPS triples my housing allowance. Have a wife and kids and things, in total, probably triple.

I don't think people understand how to not waste money any more.

Does this mean you're not going to be buying the new disposable laptops from Apple? How will you live with yourself?

A modest house in the valley costs something like $500k. With a typical mortgage you can expect to pay about 1% of the total price ($5k). That's more than triple your total expenditures, let alone housing costs.

I assure you, it's quite possible to live an enjoyable life in a place that's much cheaper the valley.

I'd rather spend my time writing software then repairing my old socks. As a bonus, writing software makes me about 100x what repairing my old socks nets me per hour.

Where do you live? This is HUGELY dependent on geography. $18k a month in NYC, Seattle, SF, etc., is pretty painful. Add two kids, private school (unless you live in a great district), college educations, saving for retirement, summer camp, braces, health care for 4, housing for 4 in a good neighborhood, helping out your retired parents who might not have saved enough, etc., it stacks up pretty fast.

$18k/yr in NYC or SFBA with a mortgage and a family is untenable.

$18k/yr in most major US cities probably implies:

* Subsistence diet

* Dependence on small selection of rental properties

* Extremely poor access to health care

* Dependence on informal "gratis" child care

* Near perfect job attendance

I call these out not to make the boring "gnash our teeth about the lives of the poor" case, but rather the suggest that your ability to care for a family on 18k/yr in a US metro is counterfeit: you can do it until you:

* Are ever hospitalized

* Lose your free child care

* &c ...

... at which point bang you're bankrupt. I think a lot of people who think they are getting by with low incomes are actually playing a kind of sick inverted Martingale betting strategy against life.

Well my point is not that everyone should be able to live off $18k a year. My point is that You don't need $500k a year to live decently. I have a new car, a good apartment and amenities such as cable TV and xbox live. Certainly geography plays a large role in individual costs. But again, I'm not trying to say everyone should live on $18k a year. I'm saying I (a single fellow btw) do, and it's a satisfactory lifestyle complete with all the necessities and a few luxuries.

If you have high expectations about the amount and 'quality' of your personal possessions, then sure. I'm sure most every one else can make due on that amount.

I think with wise spending and decent investments I could easily make that amount last my entire life and have quite a bit to give away at the end.

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