Author Topic: Real retirement conversation with highly compensated co worker  (Read 5457 times)

rocketman48097

  • Stubble
  • **
  • Posts: 200
Yesterday I had a conversation with a fellow manager at my company that went something like this:

Other person:  Could you live on $2M for the rest of your entire life?
Me:  Yeah, easily.
Other:  Really?  (look of shock), you really could live on that much for the entire rest of your life?
Me:  Yup, pretty easily.
Other:  How?
Me:  Well, over long periods of time the stock market returns 9%, so the income alone would be 180k per year, that's more than I live on now (80% more than I make as well but he doesn't know that, I am an accountant so I now how much he makes, 125k salary plus about 40% in bonuses, or 175k total).
Other:  Oh

He and another co worker then went on to share notes about a "gas buddy" app.  You see, this colleague just bought a 45k extended cab pick up truck, which he commutes 20 miles to work with, each way, by himself.  This is not a joke.  This was a real (painful) conversation.  It was too good not to share.  For the record, it rained this AM and I biked my 3.5 miles into work with raincoat and dry pants in my backpack with my Nashbar purchased lights on.  It was easy, my third month doing this and my legs are MUCH stronger and cardio MUCH better then when I began. 

AlmostIndependent

  • Pencil Stache
  • ****
  • Posts: 521
  • Age: 38
  • Location: Anchorage, AK
Re: Real retirement conversation with highly compensated co worker
« Reply #1 on: July 31, 2013, 02:24:52 PM »
Congrats on the biking success. It feels good to know that you are improving your body and your finances. I am always shocked at the financial ridiculousness that seems to have made its way into almost every corner of the american workplace. If I had a nickel for every conversation I had that went something like the one you posted I would have been retired a long time ago.

rocketman48097

  • Stubble
  • **
  • Posts: 200
Re: Real retirement conversation with highly compensated co worker
« Reply #2 on: July 31, 2013, 03:26:05 PM »
Wow, that's incredibly wasteful.  We have a four bedroom house with two kids and I can assure you it's too much, too big.  Luckily my wife is frugal in the utilities department and doesn't like running the AC very much, we keep it at 78 and open the windows when it cools down.  The problem with buying an expensive house is they historically appreciate at THE RATE OF INFLATION.  Therefore, she's tying up all that capital, paying interest on that money that EXCEEDS the rate of inflation, and is in the meantime house poor.  Of course I am sure she thinks buying a Hyundai SUV makes her "smart" because this is a "frugal" SUV, totally ignoring the wound in her financial arm that she is attempting to put a band aid on.

Gas buddy=  Not the solution to commuting 40 miles round trip each day, by yourself, with a 2013 extended cab truck. 


Spork

  • Walrus Stache
  • *******
  • Posts: 5753
    • Spork In The Eye
Re: Real retirement conversation with highly compensated co worker
« Reply #3 on: August 01, 2013, 08:24:23 AM »
The sad part of this isn't that they can't do math... it's that in reality I suspect they COULDN'T retire on $2M (or 1.2M as another poster was talking about). 

I've had this conversation (more or less) with friends.  Their lifestyle is such that I suspect there would be just enough consumption inflation to pretty much eat up a big sack of cash in 10-20 years.

mpbaker22

  • Handlebar Stache
  • *****
  • Posts: 1095
Re: Real retirement conversation with highly compensated co worker
« Reply #4 on: August 01, 2013, 08:31:57 AM »
The sad part of this isn't that they can't do math... it's that in reality I suspect they COULDN'T retire on $2M (or 1.2M as another poster was talking about). 

I've had this conversation (more or less) with friends.  Their lifestyle is such that I suspect there would be just enough consumption inflation to pretty much eat up a big sack of cash in 10-20 years.

Well said.  And it's not that they couldn't do it.  Anyone could do it.  It's that if they tried,(without really trying) they would fail.

AlmostIndependent

  • Pencil Stache
  • ****
  • Posts: 521
  • Age: 38
  • Location: Anchorage, AK
Re: Real retirement conversation with highly compensated co worker
« Reply #5 on: August 01, 2013, 10:10:27 AM »
The sad part of this isn't that they can't do math... it's that in reality I suspect they COULDN'T retire on $2M (or 1.2M as another poster was talking about). 

I've had this conversation (more or less) with friends.  Their lifestyle is such that I suspect there would be just enough consumption inflation to pretty much eat up a big sack of cash in 10-20 years.

Well said.  And it's not that they couldn't do it.  Anyone could do it.  It's that if they tried,(without really trying) they would fail.

Exactly. People would retire and just mindlessly spend money (because that's what you do with money) and with all their new found free time would blow through that cash like it was going out of style.