What Could You Do With A Million Dollars?

On the Stacking Benjamins Podcast I was listening to today, Joe was talking about the responses he received when he asked his Twitter followers what they would do with a million dollars.

He got some interesting responses.  Some were altruistic–donating the money or helping family members.  Some were realistic–like paying off debt.  And some were funny–like calculating the time it would take to count the money at the bank–in twenties.

It got me thinking.  What could each of us do with a million dollars?

I’m overly rational so I got out the calculator.  $1,000,000 invested should provide $40,000 of retirement income forever.  With Social Security providing 40% of our needs (as it does for the average recipient), we should have a stream of income of about $67,000 in retirement.  I could live a pretty nice life on $67,000.

That $1,000,000 invested in rental real estate should provide even more income.  According to Paula at affordanything.com, we shouldn’t invest in a property unless it will rent for 12% of the purchase costs per year, 6% of that goes to costs and that leaves 6% return for us.  Our retiree now has an annual stream of income of $100,000 including Social Security.

Now we’re talkin’!  With that income, we could do some really cool altruistic stuff too! Continue reading “What Could You Do With A Million Dollars?”

Yikes–I Went Back To Work!

Almost universally, when I talk about being retired, people say “but you’ll go back to work someday–right?”  I’ve been asking some close friends about this.  Why are people trying so hard to un-retire me?  Are people more comfortable with me if I have a lifestyle similar to theirs?  Well, I guess I’m going to make those folks a bit more comfortable.

I’m adding a word to my title–I’m now Semi-Retired.  I’m an accidental Semi-Retiree.

I guess I’ve been a Semi-Retiree since I started this blog in July.  The blog is work–right?  But I made $20 on the blog last year, and I spent over $3,000.  Most of it was to attend a financial bloggers conference (yep, that exists).  But over $600 was for hosting and software.  So I guess this blog is the worst part-time job ever–but I love it.  And my readership is growing and someday it may make a few dollars (in case the IRS is reading this). Continue reading “Yikes–I Went Back To Work!”

How Are YOU Doing On Your Path To Retirement?

I’ve written a lot about my path to retirement.  The savings rates it took to retire at 51 and the choices we made.

savings-rate-nw-accum2

I’ve also stressed that everyone’s retirement path is different.  We each have to find the path that works for us.

I found a great resource that can help you figure out how much you need to save, what savings milestones you should have reached at certain ages, where your retirement income will come from and how to make your retirement savings last.  Fidelity Investments released a series of articles that will help guide you on your path.

How much should you save for retirement?  They say 15% of your annual income.  This includes your contributions + any employer match you receive.  This savings is for retirement only–any other savings goals would be in addition to this 15%. Continue reading “How Are YOU Doing On Your Path To Retirement?”

Planning For Retirement?

I had a pretty basic long-term financial calculator for over a decade before I retired.  Building and updating this model helped me stay focused on making smart choices about spending and creating wealth.

I called it retire_soon.xls.  It was so old, you couldn’t have spaces in file names when it was created.  It worked fine as an estimate but wasn’t something I was comfortable basing my quit no-quit decision on.  Though it said quit!

Then my company’s 401k plan introduced a calculator that could tell me whether my finances looked rainy 🙁 or sunny 🙂  It said quit!  But it was like the wizard behind the curtain–I couldn’t control (or even know) what assumptions were being used for inflation, investment returns, social security adjustments etc.  I couldn’t adjust my spending assumptions down as I aged.  I couldn’t vary my investment returns by year–the S&P doesn’t just march along at the same rate each year. Continue reading “Planning For Retirement?”

Retirement or “We Don’t Have To Work Anymore”

Friends of ours just invited us to their “We Don’t Have To Work Anymore” party!  It has been interesting to participate in their thought process as they got comfortable with this decision.

We hike with these friends–a lot.  So we have had hours of conversations about retirement and money.

He was a successful business owner who recently sold his business.  He was to stay on for a period of time but had some disagreements with the purchaser so they figured out a way for him to exit the business.

She has a consulting business that has slowed down in recent years.

So they both found themselves with time on their hands and not enough invested (they thought). Continue reading “Retirement or “We Don’t Have To Work Anymore””

You Gotta Figure Out Your Why

My WHY is up top.  I wanted to be playing in the desert in January . . . . and February, March, April, November and December.

I live in the Colorado mountains 30 minutes away from world class skiing.  It’s an amazing place to make a life if you can make a living and we made a great living and life there.  But here’s the thing about living 30 minutes away from world class skiing: Continue reading “You Gotta Figure Out Your Why”

Social (in)Security is Complicated!

Many of my younger readers think they will not receive Social Security.  This is because the trust funds are predicted to be exhausted sometime around 2034.

There are many reasons the government will not allow Social Security to disappear.  Social Security payments keep about 35% of older Americans out of poverty and is the principle source of income for nearly half of this group.  It simply cannot go away without destabilizing our country.  Oh, and old people vote so it will never happen.

But things will definitely have to change. 

Continue reading “Social (in)Security is Complicated!”

12 Steps To A Kick A$$ Life

How should you balance your different financial goals?  Should you save for retirement before your credit cards are paid off?  How about student loans?  I thought it might help to talk about the steps to reach financial independence.

Want to accelerate your progress through these steps???  Calculate your net worth regularly and track your spending.  And to stay on track with these steps, you have to figure out your why.  Otherwise, it will be way to easy to start chasing the next shiny object rather than keeping your eye on the prize that matters most to you.

Ok here they are, Ms. Liz’s steps to a Kick A$$ Life: Continue reading “12 Steps To A Kick A$$ Life”

On Finding My Retirement Balance

There are a couple balances that really matter in retirement.

We’ve talked a lot about financial balances.  How much money you have, how much you spend and how much you need.  This balance is important so you can have a retirement free from excess worry.

I’m a worrier so it’s impossible to think that I would not worry about my finances in retirement.  But I have adequate cushions and contingency plans so I don’t have to worry about money . . . much.

The other balance that I’m still trying to figure out is how to balance my time.  Continue reading “On Finding My Retirement Balance”

Live With No Regrets

I tend to live without regrets on the big stuff.  I look back at each change I’ve made in the course of my life and I’m happy I made it.

Happy I moved to the mountains, happy we moved back to the city, happy I went to law school, happy I quit law school after a year, happy we moved back to the mountains, . . . . I think you get it.

I love my life and I’m happy for the sometimes windy path that got me here.

But I went to a conference in September and met a bunch of kick A$$ people.  People in their twenties and thirties who were saving amazing amounts of money, living on what sounds like not much so they can retire young.  Remember, if you save 70% of your income, it only takes 11 years to save enough to retire.  I met several people who were doing just that. Continue reading “Live With No Regrets”