How much money does a person needs in his bank account to stop working and can just live off of it?

Answer 1

How much do you need to live on in a year? How long do you plan on living? What kind of account? Does it have interest and how much?

Ok, lets say you are 25, plan to live to 100, need $35,000 a year to live, and have your money in an interest bearing account that yields 3%. 1.2million will give you about 35 grand a year but with inflation, that will probably not be enough to live off of by the time you are 100. 2 million might work if you only take 35,000 + whatever will compensate for inflation from what the interest brings and put the rest back into the account.

Another plan is to just have the money and not live off of interest. You take what you need and multiply it by how much longer you have and put that much in the bank. In that case you will need 2,625,000 for 35 grand per year for the next 75 years. What happens if you live past 100? Oh well.

Of course, there are better places to put your money. Different investments that might bring you a better return. Odds are, if you can raise the money to stop working altogether, then you are not the type who wants to stop working altogether.

Answer 2

Good question.I am almost financially free with about a mil made in 4.5 years from business and investing.
Money in the bank?Poor interest rate so you need a lot.
Where do you want to live?Thailand or malaysia you can do on about $1200/month for basic creature comforts .Of course europe and N america is about 3 times that.
There are good investments out there.Spend 20 mins a day researching investing and at the end of the year you should have your answer

Answer 3

The amount you need depends on the interest rate.
Assuming a return of 7% you would want at least 500K which would give you 35K a year in interest. Then you can live somewhat frugally and save a little bit so that your nest egg will grow.

Or think of it this way
Add up:
Amount you need to live on
Taxes
Savings for growth
Then multiply that by 15, assuming about 7% interest
Thats how much you would need

Answer 4

Inflation is unpredictable so you need an investment that will allow you to spend more and more each year. You can't do this with a bank accont.

You could invest in inflation bonds.

Remember the government can always change the rules including raising taxes. Before Ronald Reagan taxes were up to 90%.

Democrats, love to say tax the rich and that turns out to be everyone with an income.

What if the government is replaced, say a revolution of the poor (a group getting bigger every year) or a war we lose say to Russia or China (we are systematically tearing down our military every year).

You need to be very rich with diverse assets many of which are hidden to have any chance to be reasonablly comfortable.

Answer 5

Well it would totally depend on your standard of living >
Add up all the expenses of stuff you must have (shelter, food, transportation, medical insurance) then multiply by 12 to figure for the year.
So 1 yr $$ living costs = 1yr$
As 5% is about the best bank savings interest,
figure 5% of bank $ to = 1yr$
(.05) Bank$$ = 1yr$
Bank$$ = 1yr$ / .05

If you need $5K per month, that would be $60K per year
so
. . . (5%)$$ in Bank = $60K
$$ in Bank = $60K / .05 = $1.2 M

Whoooopsss, forgot taxes on that earned $60K, so back figure for that . . .

Answer 6

Depends on your age, Im 36, I would probably need 5-6 million. I like money, and Im a woman, men might be different. Maybe 2-3 million, (if youre 36 too)

Answer 7

A simple formula : Take any amount, divide it by 2 and then drop a zero.

We will do ONE MILLION for the example :
$1,000,000.oo divided by 2 = $500,000.oo DROP a zero = $50,000.oo.

Can you life off $50,000.oo a year?? If so then you will need to have one million dollars in an investment account and NOT a bank savings account.

Simple simple!

Answer 8

It depends how you live your life. Actors and stuff would probably only last a few years on many millions the way they burn through money, but a thousand gypsies could live until they die on the same money.

Answer 9

You have the dream of most people.
Assuming you can get 5.5% interest, then for every $1,000 annual income you want,you must deposit $18,200.
So, if you are satisfied with, say, $15,000 pa, you must deposit $273,000. But bear in mind that the cost of living rises every year and so it is better to deposit $300,000

Answer 10

Depends from currency to country. Earn in a potentially higher value currency and live in lesser one.