I want to retire when I'm 40. I want to live a simple life in Hawaii. I would have a house paid in full. How much cash do I need to live out the rest of my life in paradise?
2006-12-05 23:39:00 · 7 answers · asked by Sax M 6 in Business & Finance ➔ Personal Finance
Your million, invested in a mutual fund will yield you approx. $50,000 annually to live off in interest.
Can you live off that ??? If not then you need to have more put away. If you have no mortgage that is a bonus. A monthly income of $4000 is nice but if the standard of living exceeds that then again you need to save more.
The formula for the amount of money you will make off a certain investment is : drop a zero and dived by 2
1,000,000,drop a zero goes to 100,000, divide by 2 = $50,000.
Happy retirement !!!
2006-12-06 02:31:51 · answer #1 · answered by Kitty 6 · 1⤊ 0⤋
At 40, no way! A million dollars is not alot of money. Why not instead go there and live the lifestyle you want but take on a small job at the same time. Something that really interests you and you will enjoy. Surely you would get bored if you did nothing for the rest of your life and this would give you peace of mind financially.
2006-12-05 23:44:54 · answer #2 · answered by Anonymous · 1⤊ 0⤋
only you can answer the question, but here are some considerations to develop a simple model.
1. do a budget of your expected annual expenses. (annual because some things like property taxes only occur annually or semi-annually.) be realistic with yourself and be conservative.
2. predict an inflation rate and apply it to your budget. expect an increase from the past few years due to our huge fed deficits.
3. predict how much money your $1million will make each year over the long run. some people suggest 7%. be conservative and use 6%.
4. start with your $1 mill, subtract the annual expenditures, add the annual income (don't forget to take out taxes) and you have a new balance. do this every year until you run out of money. don't forget to inflate the annual expenses.
5. if you run out of money in your model at an early age, then the answer is no.
6. assume a part time, low income job and add that to the income side of your model and you'll see that it adds lots of years to your funds.
2006-12-06 04:28:12 · answer #3 · answered by Ovrtaxed 4 · 0⤊ 0⤋
I'd bet a million dollars that none of this comes to pass. Very few people accumulate a million dollars liquid by 40. Only 1% of Americans ever do in their entire lives. Most of them when they're much older than 40. My guess is you're very young. You've got a lot to learn. It's nice to dream, but be realistic. You'll do better. Plus, what the hell would you actually DO with yourself? If it's your goal to just sit around your work ethics aren't strong enough to achieve wealth.
2006-12-06 01:11:29 · answer #4 · answered by Big R 6 · 1⤊ 0⤋
I don't think $1 million will last unless you invest it wisely. And if you plan on living in Hawaii, you'll definitely need more than $1 million as the cost of living is very high.
2006-12-05 23:47:57 · answer #5 · answered by DJ 5 · 2⤊ 0⤋
I highly doubt it, we have a serious credit problem today. Banks and the govt + low interest rates have cheapened the US dollar ie- inflation will get out of control soon (already is) , $5 gas is on the way, real estate market is about to tumble
I would not bank on a million to retire.
2006-12-05 23:44:16 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Based on the detailed projections you have provided about your cash requirements and lifestyle, I would say that you would need more money than a million.
Perhaps you should do an even more detailed projection of your various cash expenses: food, clothing, insurance, transportation, entertainment, etc.
2006-12-05 23:42:47 · answer #7 · answered by fcas80 7 · 0⤊ 0⤋