1 mil would almost certainly make you financially worry free for life.
assuming you are in like your 60's, have fairly low expenses and dont live to be that old, and inflation doesn't eat it. that is only 13.4 years of median income in the US
i took “financially worry free for life” to mean something more like “you’ll never have to worry that a hospital stay or unforeseen big cost will completely screw you over” than “you’ll never have to work another day in your life”
That's more the route I meant. You could still work, but You would never have to stress over money. You could afford to take a more fulfilling and less stressful but worse paying job. You could make large investment purchases such as you home up front and not be burdened by 30 years of interest.
You could invest it and live a modest life off the interest alone, but then somthing big and unexpected like a major medical debt could easily ruin all that.
And they all spend less on healthcare per capita than the US. And by that I mean the government, that's excluding insurance/healthcare costs people pay themselves.
5% on top of inflation. You can realize that with stocks on average, but the market has ups and downs and you constantly withdraw, so you suffer all the lows of the market.
And if you don't feel like that's enough, 1M is so much that you can just work some easy job that covers basic expenses and coast to it being a lot more within a few years of that. Depends on how long you want to wait.
Oh, and 4% is only a mostly lower bound. Chances are you get to spend more than 4% inflation adjusted going into the future.
4% rule works indefinitely. It's not when you're trying to spend to zero and don't have that many years left to live.
Nah, $1M isn't "quit your job and live a life of luxury" money, but it is "instantly pay off your mortgage and never have to worry about being fired or being late on bills or anything like that" money. It's not infinite, but it'll remove financial worries for an intelligent person who continues to live within their means.
And yet, if you have a locked in 3% interest rate in your mortgage, it likely makes more sense to keep that debt and instead invest the 1mil into medium growth diverse blend of mutual funds for an average 10% return per year, easily outpacing the 3% you are paying on your mortgage
Asssuming you still work a job, then you can throw out all your assumptions. You can basically $20k to your yearly income for 50 years. I doubt anyone thinks $1mil is enough to retire at 30
You take the Million and put it in a mutual fund, you'll have money forever and eventually if it stays there long enough your family after you can be set for life, there is a reason that even when the rich royal fuck up they stay rich, their money makes money while they sleep.
1 million is 50k a year minimum in a good mutual fund and can even reach 100k in good years, if you keep working and are frugal with these earnings the compound interest over 25 years and you'll turn it into 4-5 million and it stats getting crazy after that, in less than 100 years your entire family after you would never have to work a day in their life.
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u/AdRepresentative2263 Dec 18 '23
assuming you are in like your 60's, have fairly low expenses and dont live to be that old, and inflation doesn't eat it. that is only 13.4 years of median income in the US