Author Topic: Do you have a Magic Number (post-Fire only)  (Read 6069 times)

smoghat

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Do you have a Magic Number (post-Fire only)
« on: November 26, 2019, 06:09:26 PM »
Ive been FIREd for three years. During that time, weve gotten a lot of the desire to spend out of our systems, and plowed a lot into our house (Im an architect in all but legal status so I know what Im doing... not only do I want this place to look great, I want to get it published in the shelter magazines which will get it a significantly higher price bump up than it otherwise would have had), but weve still made some money. My magic number is $5 million. Todays the first day in over a year that our accounts closed above it. Whoopie, its time for a celebration (and we are going to a huge snowstorm in the Sierras to celebrate). Ill sleep better tonight. Do you have a magic number?

secondcor521

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Re: Do you have a Magic Number (post-Fire only)
« Reply #1 on: November 26, 2019, 07:03:03 PM »
How do you define "Magic Number"?  Once you define the term, I can tell you if I have one.

Malkynn

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Re: Do you have a Magic Number (post-Fire only)
« Reply #2 on: November 26, 2019, 07:03:53 PM »
Yeah, I have literally no idea what you are asking...

soccerluvof4

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Re: Do you have a Magic Number (post-Fire only)
« Reply #3 on: November 29, 2019, 03:05:23 AM »
I think if I saw my NW hit 4 million at this stage in my life I would change my portfolio to more "Protectionism" less wealth building if thats what your asking.

SwordGuy

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Re: Do you have a Magic Number (post-Fire only)
« Reply #4 on: November 29, 2019, 08:25:14 AM »
I guess @smoghat wasn't all that interested in our answer...

flyingaway

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Re: Do you have a Magic Number (post-Fire only)
« Reply #5 on: November 29, 2019, 10:03:42 AM »
Ive been FIREd for three years. During that time, weve gotten a lot of the desire to spend out of our systems, and plowed a lot into our house (Im an architect in all but legal status so I know what Im doing... not only do I want this place to look great, I want to get it published in the shelter magazines which will get it a significantly higher price bump up than it otherwise would have had), but weve still made some money. My magic number is $5 million. Todays the first day in over a year that our accounts closed above it. Whoopie, its time for a celebration (and we are going to a huge snowstorm in the Sierras to celebrate). Ill sleep better tonight. Do you have a magic number?

Did you include your multi-million dollar house in the $5 million?

2Birds1Stone

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Re: Do you have a Magic Number (post-Fire only)
« Reply #6 on: November 30, 2019, 07:37:49 AM »
No, I don't have a magical number which requires bragging about, to strangers on the internet.

Cassie

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Re: Do you have a Magic Number (post-Fire only)
« Reply #7 on: December 01, 2019, 03:37:45 PM »
No.

spartana

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Re: Do you have a Magic Number (post-Fire only)
« Reply #8 on: December 02, 2019, 09:43:01 AM »
I  also don't know what the OP means unless they mean a personal number that they wanted to achieve for "comfort"  or "success' reasons which are different then their needed FIRE number. If that's the case then I don't have one either. As long as I have enough to meet my needs and my few wants without being dependant on others then I'm good.

Threshkin

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Re: Do you have a Magic Number (post-Fire only)
« Reply #9 on: December 03, 2019, 10:42:00 AM »
Everyone's magic number is different but I recommend you use a WR percentage rather than a NW dollar amount.

The most common generic number used is 4% but if you might want a lower or higher percentage depending on your situation and risk tolerance.

For example, I use 3% but I am very conservative in my calculations and am concerned about both longevity risk and health care costs.  The last thing I want is to be old and sick AND poor.

On the other hand 5% or higher is not uncommon around here.

Malkynn

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Re: Do you have a Magic Number (post-Fire only)
« Reply #10 on: December 03, 2019, 11:01:26 AM »
What the fuck is a "magic number"??

Threshkin

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Re: Do you have a Magic Number (post-Fire only)
« Reply #11 on: December 03, 2019, 11:06:26 AM »
What the fuck is a "magic number"??

Typically it is a target net worth number that you need to reach to be FI.  A few years ago one of the big financial institutions ran an add campaign that used the "What's your number?" tagline.

spartana

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Re: Do you have a Magic Number (post-Fire only)
« Reply #12 on: December 03, 2019, 11:45:26 AM »
What the fuck is a "magic number"??

Typically it is a target net worth number that you need to reach to be FI.  A few years ago one of the big financial institutions ran an add campaign that used the "What's your number?" tagline.
I didn't get that the OP was asking for our FIRE number but some other number beyond that. I got the idea they were already FIREd but still wanted to reach a higher number via house improvement/sale for some reason. Most of us don't understand what that reason was.

Malkynn

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Re: Do you have a Magic Number (post-Fire only)
« Reply #13 on: December 03, 2019, 12:28:38 PM »
What the fuck is a "magic number"??

Typically it is a target net worth number that you need to reach to be FI.  A few years ago one of the big financial institutions ran an add campaign that used the "What's your number?" tagline.
I didn't get that the OP was asking for our FIRE number but some other number beyond that. I got the idea they were already FIREd but still wanted to reach a higher number via house improvement/sale for some reason. Most of us don't understand what that reason was.

Yeah, OP specifically said that they've been FIREd for 3 years, so it's clearly not their FI number.

EscapeVelocity2020

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Re: Do you have a Magic Number (post-Fire only)
« Reply #14 on: December 03, 2019, 01:27:44 PM »
All numbers are somewhat magic since they take an otherwise ambiguous representation of reality and provide a universal framework with which to interpret it.  Zero and One are particularly magical to me.  Negative numbers, irrational numbers...  all pretty cool.  Maybe when I'm post-FIRE I will be allowed in the club where my magic number will finally become clear.

ScreamingHeadGuy

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Re: Do you have a Magic Number (post-Fire only)
« Reply #15 on: December 03, 2019, 05:55:46 PM »
Post-fire my magic number will, as a rule, be 34.

EndlessJourney

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Re: Do you have a Magic Number (post-Fire only)
« Reply #16 on: December 03, 2019, 06:11:04 PM »
69

READYTOFIRE

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Re: Do you have a Magic Number (post-Fire only)
« Reply #17 on: December 04, 2019, 09:44:00 AM »
hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha

sui generis

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Re: Do you have a Magic Number (post-Fire only)
« Reply #18 on: December 04, 2019, 12:56:28 PM »
42, of course.

Malkynn

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Re: Do you have a Magic Number (post-Fire only)
« Reply #19 on: December 04, 2019, 01:02:25 PM »

spartana

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Re: Do you have a Magic Number (post-Fire only)
« Reply #20 on: December 04, 2019, 01:06:27 PM »
42, of course.
42 of course but only if you have your towel stock invested in Vanguard so you'll always know where it's at.

ETA: Seriously I hope the OP comes back and explains what he/she means. Would be interesting to know.
« Last Edit: December 04, 2019, 01:09:48 PM by spartana »

Malkynn

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Re: Do you have a Magic Number (post-Fire only)
« Reply #21 on: December 04, 2019, 01:22:47 PM »
42, of course.
42 of course but only if you have your towel stock invested in Vanguard so you'll always know where it's at.

ETA: Seriously I hope the OP comes back and explains what he/she means. Would be interesting to know.

Me too!

I hate not knowing things.
I mean, sure, we can all deduce that the "magic number" is some imagined number that makes you go "wow! Holy shit! That's an arbitrary amount of money that I wasn't certain I would ever attain and that at some point I defined as 'magic'!"

But still... I want to know.

sui generis

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Re: Do you have a Magic Number (post-Fire only)
« Reply #22 on: December 04, 2019, 02:20:31 PM »
Yeah, me too!  I've been trying to come up with ideas of how to explain what it might mean based on the their post, but nothing is a really perfect fit.  The best I have is a Lean FI vs. Fat FI type situation, for those that FIREd on a smaller stash, maybe?  I know when I was approaching FIRE I had about 6 different benchmarks I was tracking, resulting in various numbers between a 3% and 4% WR.  I ended up FIREing at 3.25%, but none of them were particularly magic for me.  They all just feel pretty arbitrary.

Malkynn

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Re: Do you have a Magic Number (post-Fire only)
« Reply #23 on: December 04, 2019, 02:24:37 PM »
Yeah, me too!  I've been trying to come up with ideas of how to explain what it might mean based on the their post, but nothing is a really perfect fit.  The best I have is a Lean FI vs. Fat FI type situation, for those that FIREd on a smaller stash, maybe?  I know when I was approaching FIRE I had about 6 different benchmarks I was tracking, resulting in various numbers between a 3% and 4% WR.  I ended up FIREing at 3.25%, but none of them were particularly magic for me.  They all just feel pretty arbitrary.

Pretty sure the word "magic" gave us all a tip off that whatever it is is pretty damn arbitrary.

neo von retorch

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Re: Do you have a Magic Number (post-Fire only)
« Reply #24 on: December 04, 2019, 03:00:48 PM »
When I was in junior high, we did some project where we drew a design and then carved it in clay, made four identical tiles and painted them. I don't remember much except that I came up with "Lotus 37" as part of the design. And decided that 37 was the "perfect number." I wasn't sure if it was my favorite number, but it was perfect. (Of course, 42 is also near and dear to my heart.)

If I had to apply it to math and money, it would be that I retire by 37. (Shoot, I have missed that age, and will likely miss it by nearly a decade!)

3.7 million (USD) would be way too much to retire on... I'd have retirement income higher than what I make now. Nonsense!

3.75% is the rate of the mortgage on my primary residence.
(3.375% is the rate of the mortgage on my rental.)

3.7% might be a good target for a safe withdrawal rate, though. But I'm less conservative, so I might go with 4.2% (or even higher, gasp!)

Somewhat related, I was listening to the FM radio while commuting, and noticed that the artist name was "Foghat."

Jon_Snow

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Re: Do you have a Magic Number (post-Fire only)
« Reply #25 on: December 04, 2019, 06:55:15 PM »
Seems like a drive-by humblebrag by the smoghatted one to me. There is a segment of the forum multi-millionaires that appears to need to tell everyone how many millions they have at every opportunity. Perhaps the OP didn't want to slum it in the "Race to 3M" thread...which in my opinion is plenty humblebraggy as it is IMHO.

Malkynn

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Re: Do you have a Magic Number (post-Fire only)
« Reply #26 on: December 04, 2019, 07:14:09 PM »
Seems like a drive-by humblebrag by the smoghatted one to me. There is a segment of the forum multi-millionaires that appears to need to tell everyone how many millions they have at every opportunity. Perhaps the OP didn't want to slum it in the "Race to 3M" thread...which in my opinion is plenty humblebraggy as it is IMHO.

To their credit, for a lot of people, this is one of the only places that they can brag about massive financial accomplishments.

smoghat

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Re: Do you have a Magic Number (post-Fire only)
« Reply #27 on: December 04, 2019, 08:53:24 PM »
Oh gosh, well I went on vacation with the family and left the internet behind. Isnt that what FIRE is really about? Guess I wasnt clear enough in what I was asking so the peanut gallery did its thing...

EscapeVelocity2020

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Re: Do you have a Magic Number (post-Fire only)
« Reply #28 on: December 04, 2019, 09:29:27 PM »
Oh gosh, well I went on vacation with the family and left the internet behind. Isnt that what FIRE is really about? Guess I wasnt clear enough in what I was asking so the peanut gallery did its thing...

Whew, you're back!  And yet you still leave us hanging??  What is FIRE really about, dropping cryptic posts and going on vacation?, leaving the internet behind??  ...and what are magic numbers???

nancyfrank232

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Do you have a Magic Number (post-Fire only)
« Reply #29 on: December 04, 2019, 09:58:03 PM »
Do you have a magic number?

$10m in our 50s is our target

Were over $5m in our mid-40s so I think it should be attainable. Fingers crossed

/humblebrag but not really

spartana

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Re: Do you have a Magic Number (post-Fire only)
« Reply #30 on: December 05, 2019, 03:03:15 PM »
Why is that number (any high number really) magic if someone is already FI on less? Is it just to reach a certain amount for fun or is there a more practical reason for it like to leave a large amount to charity?

g46r

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Re: Do you have a Magic Number (post-Fire only)
« Reply #31 on: December 05, 2019, 04:04:43 PM »
Magic number is simple:  for the country that you choose to live your post FIRE life, figure about 80x the per-capita GDP in that country.  That would be a solid magic number.

Reason being is that labor share of GDP (the % of GDP that's paid out as wages to workers) is typically at around 60%.  A two-income family earning medium wage in that country would earn about 1.2x per-capita GDP per year in wages.  If you have accumulated wealth of 80x per-capita GDP, even a 3% long run average return on capital would give you 2.4x per-capita GDP a year, meaning you will have 2x of disposable income as the average household - very well living indeed - and you can do so indefinitely.

For the US with per-capita GDP of ~$60k, that's $4.8M.  Incidentally that's very close to that $5M number that someone just mentioned.

secondcor521

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Re: Do you have a Magic Number (post-Fire only)
« Reply #32 on: December 05, 2019, 08:12:44 PM »
Why is that number (any high number really) magic if someone is already FI on less? Is it just to reach a certain amount for fun or is there a more practical reason for it like to leave a large amount to charity?

Yes, this is the question I wished OP would answer.  I didn't really appreciate the "peanut gallery" comment after OP ghosted everyone, but whatever.

@smoghat, care to answer a reasonable basic question?  (If not, that's OK with me but it would put you in the troll category in my opinion.)

profitprophet

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Re: Do you have a Magic Number (post-Fire only)
« Reply #33 on: December 05, 2019, 10:32:21 PM »

spartana

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Re: Do you have a Magic Number (post-Fire only)
« Reply #34 on: December 06, 2019, 08:21:45 AM »
Magic number is simple:  for the country that you choose to live your post FIRE life, figure about 80x the per-capita GDP in that country.  That would be a solid magic number.

Reason being is that labor share of GDP (the % of GDP that's paid out as wages to workers) is typically at around 60%.  A two-income family earning medium wage in that country would earn about 1.2x per-capita GDP per year in wages.  If you have accumulated wealth of 80x per-capita GDP, even a 3% long run average return on capital would give you 2.4x per-capita GDP a year, meaning you will have 2x of disposable income as the average household - very well living indeed - and you can do so indefinitely.

For the US with per-capita GDP of ~$60k, that's $4.8M.  Incidentally that's very close to that $5M number that someone just mentioned.
Everyone's post-FIRE life is different, even in the US, so everyone's post-FIRE number is going to be different. There is no rule (or magic number) that fits each individual the same.

EscapeVelocity2020

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Re: Do you have a Magic Number (post-Fire only)
« Reply #35 on: December 06, 2019, 02:00:42 PM »
Magic number is simple:  for the country that you choose to live your post FIRE life, figure about 80x the per-capita GDP in that country.  That would be a solid magic number.

Reason being is that labor share of GDP (the % of GDP that's paid out as wages to workers) is typically at around 60%.  A two-income family earning medium wage in that country would earn about 1.2x per-capita GDP per year in wages.  If you have accumulated wealth of 80x per-capita GDP, even a 3% long run average return on capital would give you 2.4x per-capita GDP a year, meaning you will have 2x of disposable income as the average household - very well living indeed - and you can do so indefinitely.

For the US with per-capita GDP of ~$60k, that's $4.8M.  Incidentally that's very close to that $5M number that someone just mentioned.

I like how it starts out with, 'magic number is simple', then throws a bunch of arbitrary numbers around willy nilly.  Just as valid is saying research has shown that  happiness peaks at $75k per year and, using the 4% rule, you need $1.875M in invested assets (not your primary home and cars) to generate that. 

Also, $95k (~$2.5M) gets you to the top end of the range for balance between achieving goals and peer comparison.  Above this, emotional well being may start to decline:
Quote
The researchers, from Purdue University, also found that it may be possible to make too much money, as far as happiness is concerned. They observed declines in emotional well-being and life satisfaction after the $95,000 mark, perhaps because being wealthy past the point required for daily comfort and purchasing power, at least can lead to unhealthy social comparisons and unfulfilling material pursuits.

One

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Re: Do you have a Magic Number (post-Fire only)
« Reply #36 on: December 06, 2019, 02:11:29 PM »
More

dougules

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Re: Do you have a Magic Number (post-Fire only)
« Reply #37 on: December 06, 2019, 03:31:33 PM »
Was this a trolling?  I was lurking hoping for some clarification.

Loren Ver

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Re: Do you have a Magic Number (post-Fire only)
« Reply #38 on: December 06, 2019, 05:27:23 PM »
When I was in junior high, we did some project where we drew a design and then carved it in clay, made four identical tiles and painted them. I don't remember much except that I came up with "Lotus 37" as part of the design. And decided that 37 was the "perfect number." I wasn't sure if it was my favorite number, but it was perfect. (Of course, 42 is also near and dear to my heart.)

If I had to apply it to math and money, it would be that I retire by 37. (Shoot, I have missed that age, and will likely miss it by nearly a decade!)

3.7 million (USD) would be way too much to retire on... I'd have retirement income higher than what I make now. Nonsense!

3.75% is the rate of the mortgage on my primary residence.
(3.375% is the rate of the mortgage on my rental.)

3.7% might be a good target for a safe withdrawal rate, though. But I'm less conservative, so I might go with 4.2% (or even higher, gasp!)

Somewhat related, I was listening to the FM radio while commuting, and noticed that the artist name was "Foghat."

That's pretty funny @neo von retorch, as DH and I had a 37 vs 36 discussion for ages when talking about RE.  Thirty seven is all good and prime, but 36 is a very nice number for other reasons.  In the end, I went with 36 and retired 11 days before my 37th birthday.  Kinda arbitrary, but I guess now that is my "magic" number :).

frugal_c

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Re: Do you have a Magic Number (post-Fire only)
« Reply #39 on: December 06, 2019, 06:26:30 PM »
420

ysette9

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Re: Do you have a Magic Number (post-Fire only)
« Reply #40 on: December 07, 2019, 02:17:35 PM »
42