Agree...however my rent is already calculated into my annual spending....
ok - just wanted to make sure since you were comparing MMM's initial savings with your own personal goal. Many people read headlines like "
MMM and his family of four live off only $24k/year!" and never realize that its without paying for rent or a mortgage.
Your posts are a bit muddled, giving a goal (retire by 40) but not a timeline (how many years until you hit the big 4-0). Also you mention anticipated spending is $20/year [sic], as well as 18-20k (same ballpark). Then income from part-time teaching may be $10k to start (is that in addition to the $18k-20k you plan to spend, or will that be part of it? will you continue to teach for years into retirement?). However, you say you plan on investing that $10k instead of using it to defray your expenses. Finally you throw out there that you want to buy a small house/apartment " to reduce cost of monthly rent where I can live/retire". Buying a place is all fine and good (I have my own home) - but buying a home won't necessarily ease your expenditures, especially since it will require either a mortgage or a lump-sum investment.
So first, here's my boiled-down assessment.
You have $459k in investments right now, with the potential to save "10k-14k per year"
To support $18k/year spending, you will need $450k invested in the market, assuming a 4% SWR.
Congratulations, you are already there - BUT, this historically only works when the majority of your money is in the market, not with 90% of it sitting liquid.
If you plan on buying a home you will have to adjust your spending to account for this, since you do not currently have enough in your savings to purchase a home and support $18k withdrawls (unless you find a place for $9k - maybe a yurt somewhere in the jungle?) If the expected $10k/year in part-time teaching could be applied towards housing, you could easily afford to purchase something for $120k and only have a 15 year term.
If you can clarify any of the details above (years until goal, whether part-time teaching income will be in addition to your $18k expenses or included with it, and whether you plan on ever investing more into the market) then we can help more.
cheers
N