There’s a rule of 4%, meaning that you should not withdraw more than 4% of your investments per year to keep the ball rolling. To cover the US average salary you have to have $1.65m invested. Good luck finding a house for $450k and living without medical insurance.
If you want to have insurance, then your 4% minimum rises up to $1.875m. And I really don’t think you can buy any house for $125k…
The problem with people who think that $1-2m is enough is that they were born in the 1980-s or something when $1m was a lot of money. But inflation is a thing and that money is not enough anymore. If you ask me, $10m is a bare minimum today to be set for life and not to worry about finances ever.
If you’re withdrawing the average US salary, that would also cover mortgage payments, so you could put the entire 450k down on a more expensive house and still live comfortably. Most people making average salary don’t own their house outright and pay nothing for housing. So yeah, by your calculations 2m is more than enough.
Good luck finding a house for $450k and living without medical insurance.
I have to say, thats still a large swath of the US. Also depending on the interest rate, it could be better to have the mortgage rather than bought outright.
I also know a few folks who do just enough work to get medical insurance, and they really enjoy it that way. They have enough from their investments, and the ~30hr/wk they work is enough to get medical, dental, and vision. One works a horse stable, another worked at Starbucks for a while (when it still seemed like a decent company). At that point, there was enough return from investments that she started her own coffee shop (and brought in a couple other employees from Starbucks she really liked working with).
$2 million is still plenty for most people.
Edit:
Max $450k, 4br, 2ba, sorted by price high to low.
You can get more for less depending on location, but there you go.
It really really depends on your standard of living too. This number will be different for everyone. Some would be happy with 125k house, it’s small and nothing fancy, but the 5 bedroom 2 car garage house, not for everyone.
Anywhere outside a major city in the Midwest. If you don’t have to work any more and worry about commute then you can get a decent house in the country.
There’s a rule of 4%, meaning that you should not withdraw more than 4% of your investments per year to keep the ball rolling. To cover the US average salary you have to have $1.65m invested. Good luck finding a house for $450k and living without medical insurance.
If you want to have insurance, then your 4% minimum rises up to $1.875m. And I really don’t think you can buy any house for $125k…
The problem with people who think that $1-2m is enough is that they were born in the 1980-s or something when $1m was a lot of money. But inflation is a thing and that money is not enough anymore. If you ask me, $10m is a bare minimum today to be set for life and not to worry about finances ever.
If you’re withdrawing the average US salary, that would also cover mortgage payments, so you could put the entire 450k down on a more expensive house and still live comfortably. Most people making average salary don’t own their house outright and pay nothing for housing. So yeah, by your calculations 2m is more than enough.
I have to say, thats still a large swath of the US. Also depending on the interest rate, it could be better to have the mortgage rather than bought outright.
I also know a few folks who do just enough work to get medical insurance, and they really enjoy it that way. They have enough from their investments, and the ~30hr/wk they work is enough to get medical, dental, and vision. One works a horse stable, another worked at Starbucks for a while (when it still seemed like a decent company). At that point, there was enough return from investments that she started her own coffee shop (and brought in a couple other employees from Starbucks she really liked working with).
$2 million is still plenty for most people.
Edit:
Max $450k, 4br, 2ba, sorted by price high to low.
You can get more for less depending on location, but there you go.
It really really depends on your standard of living too. This number will be different for everyone. Some would be happy with 125k house, it’s small and nothing fancy, but the 5 bedroom 2 car garage house, not for everyone.
Where are you finding $125k homes that arent previous crackhouses?
Anywhere outside a major city in the Midwest. If you don’t have to work any more and worry about commute then you can get a decent house in the country.
An older small house 30+min from a smaller city with some fixing to do.
Previous crackhouses are more likely to be auctioned or sub 100k in all but the craziest areas.
There are a lot of ifs, sure. That’s another reason why a blank statement that $2m is enough is plain wrong.