Starbucks People

[Loch]

Just as an aside, do we have to call them 'people'... how about 'Starbucks Customers' instead?

[forumname]

As for the 250k you mentioned, I'm hoping that by "early retirement" fund you mean "what I need on top of regular retirement money to be able to retire earlier". If you did your math and came up to that (which, without running the numbers, looks reasonable), then that is fine, but that could also be different for others.
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I only NEED about $300k total to be able to shut it down and live off returns. That assumes a more conservative assumption than 10% and does take inflation into account. Of course things can change wildly and it all falls apart, but that goes for every situation.

That said, I will probably wait for a slightly larger number and will in all likelihood work beyond that in spurts to occupy myself and make things a bit more comfortable, but I'm looking forward to the 'not having to' part.

[Dutch]

10 % a year for 20 years straight? If you have any kind of proven track record with that performance please tell me you work in finance and pm me for sure. I unfortunately pay too much for less performance than that by a wide margin.

you PAY someone ?

obviously 10 percent is not straight. Everything goes up and down. I work with guys that recovered 2008 losses by end of 2009, whereas the masses did only recover sometime in 2013 at the earliest.

There are a lot of variables obviously.

[STLblues]

Life is full of incentive everything we do is an incentive based transaction....at that moment a drink carried with it more utility than a $4 investment maturing in twenty years.....that's how this riddle is answered in a technical manner....case closed

Lol

Wow wasn't this OP about sbux ? I love it keep it up guys...I'm having fun

[STLblues]

you PAY someone ?

obviously 10 percent is not straight. Everything goes up and down. I work with guys that recovered 2008 losses by end of 2009, whereas the masses did only recover sometime in 2013 at the earliest.

There are a lot of variables obviously.

Yeah and they suck...you know a good one?

[Dutch]

For starters... you're comparing consumption to investment. They are totally different things. I can hypothetically live like a homeless person, save every penny I make and live off crumbs, and "invest" that to be worth a tens of millions in future value. Of course I won't ever live long enough to see a dime of those theoretical millions because I'll be dead long before due that due to poor health, depression, or any number of reasons due to my extreme frugality. Point being - it is silly to compare a consumption item to an investment.

You compare investments to other investments. There is no "rate of return" on coffee. Also, as someone else noted earlier, it is simply not practical to save all of that money and reinvest it in savings. People just don't do that. When you save 20% off on a pair of jeans that are on sale, do you put all those savings in the bank for 20 years? Or more realistically, will you walk a few steps to the next store and say "hey I just saved 20 bucks, I'm going to treat myself to a new belt".

Also... $90,000 is NOTHING after you adjust for inflation over a 20 year period. It is worth peanuts.

The long-term compounded REAL rate of return (by that I mean adjusted for inflation) on equity is about 5.5%. In the real world, prices go UP... you can't buy things in the future for today's dollars. On top of that... practically speaking, your average joe consumer will never have the flexibility to tie his savings up for 20 years without tapping into it... this thing called LIFE happens and it's expensive. Mortgages are expensive. Kids are expensive. Drugs are expensive. Only the rich can afford to invest with that kind of long-term horizon and truly benefit from the long-term economic upswing.

Finally... if you think you can comfortably "retire" off of $250k... you're in for a rude awakening when you get old lol

I agree with pretty much everything here, EXCEPT the fact that "only the rich can afford to invest with that kind of long term horizon"

Maybe the dollar amount figure they invest, but the average middle class person can get the same strategies the wealthy have for as little as $50 a month.

$250k for retirement is indeed not enough. But it's more than most people have in today's world.

[joee]

I like both Tims and Starbucks. I get Tims probably each weekday and go to Starbucks once on the weekend. I usually get their blonde roast or an americano (it's $3). My wife get's the chai latte. Usually it's at Chapters I use it as an excuse to sneak away from the wife and kids in the childrens section so I can look at books on my way to "get coffee".
But the only time I have had someone buy a coffee is when I was a new dad going through the drive thru and was checking on my son in the accidentally bumped the car ahead of me. The guy I bumped just moved up a bit and asked if his car was okay out his window. I said ya no scratches, and he bought my coffee for me!

[Nights]

I only NEED about $300k total to be able to shut it down and live off returns. That assumes a more conservative assumption than 10% and does take inflation into account. Of course things can change wildly and it all falls apart, but that goes for every situation.

That said, I will probably wait for a slightly larger number and will in all likelihood work beyond that in spurts to occupy myself and make things a bit more comfortable, but I'm looking forward to the 'not having to' part.

If the math works out, then the math works out. I don't have your spreadsheet with expected income, returns, expenses and all that, but from previous discussions (iirc) you seem to be one who would have covered looking at that already.

I've just been reading a lot on the subject (well, personal finance in general - with a tinge of getting ready for adult life ;P) and it seems to me to be a pretty low number.

[forumname]

Finally... if you think you can comfortably "retire" off of $250k... you're in for a rude awakening when you get old lol

You know why I will be able to retire on so much less than you and most others? Because when I don't spend $4 on a coffee, I DO put it in the bank. When I save 20% on jeans, I DON'T mindlessly spend it in the next store. More likely I never bought the jeans in the first place and invested it all. Just because most people don't do something doesn't mean it isn't practical.

Finally, If you think I am sacrificing by skipping the jeans and coffee, that's your opinion. I spend money on things that add value to my life and make me happy. I own a lot of expensive things and travel constantly. If coffee and jeans are what make you happiest in life, then by all means spend your money there. I value my freedom over fancy coffees and I fully intend to buy that first.

[Dutch]

Yeah and they suck...you know a good one?

I work int he field, and don't charge my clients, as I get paid very well by the investment companies.

SO to answer your question is YES

[STLblues]

Please don't get me wrong though forumename I'm a huge fan of your lifestyle...can I please introduce you to around 200 million Americans? I wish more people lived with your level of fiscal responsibility.

[Dutch]

You know why I will be able to retire on so much less than you and most others? Because when I don't spend $4 on a coffee, I DO put it in the bank. When I save 20% on jeans, I DON'T mindlessly spend it in the next store. More likely I never bought the jeans in the first place and invested it all. Just because most people don't do something doesn't mean it isn't practical.

Finally, If you think I am sacrificing by skipping the jeans and coffee, that's your opinion. I spend money on things that add value to my life and make me happy. I own a lot of expensive things and travel constantly. If coffee and jeans are what make you happiest in life, then by all means spend your money there. I value my freedom over fancy coffees and I fully intend to buy that first.

at the end of the day though $250k is nothing, especially if you have it all in rrsp's (for Canadian folks) cause you get taxed heavily on that.

Have you ever configured your FIN number? cause most people I know it's closer to 2million+

[STLblues]

I work int he field, and don't charge my clients, as I get paid very well by the investment companies.

SO to answer your question is YES

Well pm me buddy I'm down for hearing you out....I just read flash boys by m Lewis and apparently you Canadians are the only people not trying to screw everyone!

[Dutch]

Well pm me buddy I'm down for hearing you out....I just read flash boys by m Lewis and apparently you Canadians are the only people not trying to screw everyone!

lol, Canadian government and banks are 2 biggest rip offs in the country. I assume in USA it's about the same.

[forumname]

at the end of the day though $250k is nothing, especially if you have it all in rrsp's (for Canadian folks) cause you get taxed heavily on that.

Have you ever configured your FIN number? cause most people I know it's closer to 2million+

2 million is what they want you to think you need, so you keep your head down and work til your 65. There are people who have retired much younger than I plan to, and have done so on much less. The very trick is to not buy $4 coffees. Keep your expenses low, don't fall into consumerist traps, and find happiness in more appropriate ways than through the short-term gratification of mindless spending.

There are 2 variables at play when determining how much you need to retire - how much you have saved and how fast you intend to spend it. If you can live on less, you will need less. I don't need the $80,000 a year that 2 million would give me. It would be nice of course, but not nice enough to warrant what it takes to get there. Everything is a tradeoff.