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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: lifejoy on April 28, 2017, 10:16:11 PM

Title: How much would you need to be FI if you kept working (for fun) and only lived off of that income?
Post by: lifejoy on April 28, 2017, 10:16:11 PM
It is my dream to put around $800k in the bank, only work jobs that I find fun, and then budget and live off of that income. $800k is my magic little number, but I'm now wondering if maybe $600k would do it. It's close to a FIRE strategy, but I enjoy working fun jobs and being around people and having structure. I think my DH and I could bring in at least $2k a month without trying very hard. I also enjoy the idea of being more socially "normal" by having a job.

How much would you need in the bank to let yourself work fun jobs for the next 20 years?
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Mrs. S on April 28, 2017, 11:33:23 PM
We have thought about this but I never run numbers. I also wonder what is it that I would like to do after I retire. Time to run the numbers.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Lagom on April 28, 2017, 11:47:14 PM
I am new to this life-perspective but in light of recent and very positive life-changes, I'm starting to truly understand the magic of self-belief, meaning that my number for something like you describe is decreasing by the day. To ballpark it for the sake of fun speculation, I'll first convert my wife's expected pension (already vested) into theoretical 401k dollars, which my gut tells me makes my number (as a Bay Area resident who does not own a home, mind you) something like $500-600k before I would feel comfortable experimenting with a 100% "fun" job/project approach. Granted the field I am entering (as a career changer) is pretty hot and high-paying, at least for now.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: The Money Monk on April 29, 2017, 02:10:23 AM
I'm not sure I understand. How much would I need in the bank to only work 'fun' jobs?...and...what? Still have a X% savings rate?  Still make $X per year?

Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: bigalsmith101 on April 29, 2017, 02:34:15 AM
I've thought about this. Currently I'm 30 and my wife is 28. If my wife and I were to try this approach, and planned to work only at jobs that we enjoyed for a period of 20 years, that take us to 50years old, and our future kids would be 18+.

I'd like to start the adventure with $300k in investments. Such that it has time to compound. In 20 years at 7% interest, our "Stache" would reach 1.2m, and we'd still be much younger than the average retiree.

That being said, we could start where we are with $50k in the stache, save $40k/year for the next 5 years (315k at 7%), and then scale back to a paltry savings rate of $11k/yr (IRA max savings) and still hit $1.2m at the 20 year mark.

We could earn enough to cover our expenses and hit that savings rate, and we'd probably only have to work 20-25hrs a week each, while doing fun/less than stressful work.

OR, we can save $50k'ish and hit $1m in 10 years (which is our goal), at 38/40yrs old respectively. Then we'll work when we feel like it, and do whatever pleases us while our children are 8-10 and in school full time.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: MoonLiteNite on April 29, 2017, 03:17:21 AM
I am currently at that number, 200k in investments + roommate income is actually enough to keep me afloat.
Although if i lose one roommate i would have to get a job, and even if its a job i love, i want to be able to just skip for a month and not worry about letting anyone down :D
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: lifejoy on April 29, 2017, 04:34:55 AM
I'm not sure I understand. How much would I need in the bank to only work 'fun' jobs?...and...what? Still have a X% savings rate?  Still make $X per year?

Hmm. Let me rephrase: how much would you need to have in the bank if you had to retire on it in 20-40 years? Knowing that you'd survive on your fun income in the meantime.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: chasesfish on April 29, 2017, 05:55:05 AM
You're asking one question of a three part equation.  It goes:

Annual Expenses - Could be 25k, could be 40k, could be 60k.   I'll use 40k for this example, assuming that 40k includes my cost of housing.

$1,000,000 needed in the Bank.

If I earn $12,000/year in my "fun" job, I only need $700,000 invested to supplement me in retirement.

I run these numbers a lot because we're already financially independent, but don't have enough to retire in the HCOL that we want.  I'm optimistic (but not 100% confident) people in my network will want to pay me to do some contract work and I'll want to do it for the mental stimulation.  If I earn 20k/year doing that, my retirement math changes dramatically...
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Freedomin5 on April 29, 2017, 07:15:42 AM
$150k. By the time we retire in 12 years, given a conservative 5% return, it would be worth appprox. $300k. A 4% SWR would give us $12k per year. Our rental property would also give us $12k per year.

I guess that means, at age 36, having aggressively saved for 3 years, we are basically FI. At this point we're just padding the stash because we can't just up and leave our jobs, and DH likes working.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Aunt Petunia on April 29, 2017, 09:09:45 AM
I am trying to figure this out too. My job allows me to get full benefits, including pension and a retiree medical subsidy, if I work at least half time until age 55. I would be able to pay my expenses but not save if I worked at that amount. It is tempting to do this because I won't have to worry about health insurance during ER, and I like my job as long as I am not there too much. so:

Option A: Work full time and fully FIRE in 10-12 years (age 45-47)

Option B: Work full time for about 5 years to accumulate a stash, then .5 FTE for another 15 years

Option C: Drop to .75 now and have a lower savings rate. Do this for 20 years or so
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Ocinfo on April 29, 2017, 10:46:10 AM
It depends on your FI number and age. I've been looking at this recently and there have been other threads about downshifting to part time before being FI.

Basically, if you have $500k +/- a bit in your early 30s and have a typical FI number on this site of $1 to $1.5 million you're basically set to do whatever you want fun job wise as long as it pays the bills and be in good shape to not work at all in 10-15 years based on ~7% average annual returns.

I myself will likely stop working full time in 3-5 years when I'm about 70% to FIRE. My job is fun, just not for 40+ hours per week. I'll drop to 24-30 hours, still make over $100k (yeah, I'm one of the many engineers on here) and still put quite a bit of money into savings until I just don't feel like working at all anymore (probably around 40).


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Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Ynari on April 29, 2017, 05:44:26 PM
Good question. Here's a helpful estimation tool: Given an interest rate, you can calculate how many years it will take for your money to double.

So let's take that 4% real* interest rate that that SWR is based on. Plug it into such a calculator (http://moneychimp.com/features/rule72.htm) to get 18 years. So if you plan on working 18 years and supporting yourself on fun jobs in the mean time, you need HALF of the standard 25x stash. I.e. you can live off of 24,000 a year, meaning 600,000 standard stash - if you can bring in 24,000 a year for the next 18 years, you only need 300,000 stash. If you plan on working 36 years, your money will double twice, so you only need 150,000 stash.

Obviously you could calculate an exact amount if you have exact numbers regarding how long you plan on working, how much you make each year, actual future returns (the best data is future data!), etc., but I think those ballpark figures should help guide the thinking.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: SwordGuy on April 29, 2017, 05:48:00 PM
It is my dream to put around $800k in the bank, only work jobs that I find fun, and then budget and live off of that income. $800k is my magic little number, but I'm now wondering if maybe $600k would do it. It's close to a FIRE strategy, but I enjoy working fun jobs and being around people and having structure. I think my DH and I could bring in at least $2k a month without trying very hard. I also enjoy the idea of being more socially "normal" by having a job.

How much would you need in the bank to let yourself work fun jobs for the next 20 years?

How would that be different from your "regular neighbor" who makes money and lives off of it?
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: lifejoy on April 30, 2017, 08:09:17 AM
It is my dream to put around $800k in the bank, only work jobs that I find fun, and then budget and live off of that income. $800k is my magic little number, but I'm now wondering if maybe $600k would do it. It's close to a FIRE strategy, but I enjoy working fun jobs and being around people and having structure. I think my DH and I could bring in at least $2k a month without trying very hard. I also enjoy the idea of being more socially "normal" by having a job.

How much would you need in the bank to let yourself work fun jobs for the next 20 years?

How would that be different from your "regular neighbor" who makes money and lives off of it?

Because they're probably working a job they hate for more than $30k a year!
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: GuitarStv on April 30, 2017, 08:14:45 AM
I can retire comfortably on a million.

500 grand invested over a 20 year period should yield returns of about 1.1 million inflation adjusted . . . So, my number would be about 500 k to retire while working fun jobs.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Khan on April 30, 2017, 09:23:44 PM
It depends on your FI number and age. I've been looking at this recently and there have been other threads about downshifting to part time before being FI.

Basically, if you have $500k +/- a bit in your early 30s and have a typical FI number on this site of $1 to $1.5 million you're basically set to do whatever you want fun job wise as long as it pays the bills and be in good shape to not work at all in 10-15 years based on ~7% average annual returns.

I myself will likely stop working full time in 3-5 years when I'm about 70% to FIRE. My job is fun, just not for 40+ hours per week. I'll drop to 24-30 hours, still make over $100k (yeah, I'm one of the many engineers on here) and still put quite a bit of money into savings until I just don't feel like working at all anymore (probably around 40).


Sent from my iPhone using Tapatalk

All of this. If you can hit >300k in your early 30's, you've won the retirement game, and 90% completed early retirement(50's), and very likely can achieve a 40 year old retirement at any point you want to.

Good question. Here's a helpful estimation tool: Given an interest rate, you can calculate how many years it will take for your money to double.

So let's take that 4% real* interest rate that that SWR is based on. Plug it into such a calculator (http://moneychimp.com/features/rule72.htm) to get 18 years. So if you plan on working 18 years and supporting yourself on fun jobs in the mean time, you need HALF of the standard 25x stash. I.e. you can live off of 24,000 a year, meaning 600,000 standard stash - if you can bring in 24,000 a year for the next 18 years, you only need 300,000 stash. If you plan on working 36 years, your money will double twice, so you only need 150,000 stash.

Obviously you could calculate an exact amount if you have exact numbers regarding how long you plan on working, how much you make each year, actual future returns (the best data is future data!), etc., but I think those ballpark figures should help guide the thinking.

I just wanted to bring this out. Most S&P500 historical views have it earning between 10-11% over the last 100 odd years, backing out 2-3% for inflation(and about 2% of the gains being attributable to dividends alone). That's why if you're wanting to do a conservative real gain analysis you should just default to about 7%, not 4%. (For a side note, Capital in the 21st century basically has it about 5% return on capital for most countries analyzed over the last 400 odd years I think for the various data points they've been able to get a hold of) The 4% rule is not based off 4% average returns, it's based on giving a near mathematical certainty(~>95%) success rate for retirement during any 30 year period in history for the US, of which the worst period I think runs 1964 through stagflation into the early 90's, not obtaining that sweet late 90's stock market performance.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: RichMoose on May 01, 2017, 10:43:54 AM
I could quit today with this approach. Tempting some days, haha!

Our spend (including rent) is roughly $50,000 a year. We could spend less, but this number is very comfortable for us. That implies a stash of $1.25 to $1.5M for a long time line.

Our current stash is a little over $500k, so at a moderate return we would have $4.8M at traditional retirement age.

I'm a journeyman carpenter and my wife's a teacher so, between smaller projects and sub teaching, I think we could make our expenses without too much stress.

We both enjoy working for now so we're in no rush to change. I live by the 80/20 rule. As soon as more than 20% of my workdays in a given time frame are shitty, I will quit and do something else.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: alison_peta on May 01, 2017, 12:48:50 PM
I am so glad I saw this thread. I have been grappling with this idea for a while, but now it has been clearly and simply laid out in front of me. I plan to always work at least part-time or seasonally because I enjoy the social aspects of my fun jobs. I was not entirely sure how to work this into my FI plans.

$300k today would be enough for me to live off of my side gig income and be FI in about 12 years. That is a very motivating figure considering how much I enjoy my side gigs!
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nobody123 on May 01, 2017, 01:26:34 PM
Personally, while having a "punch the timeclock" type of job with fixed hours and little responsibilty might be appealing for a day or so, I think I'd be more disappointed in myself for earning far below my potential.  If I am going to work, I am going to make as much money as I possibly can doing it.  I generally enjoy the challenge of my job and the vast majority of my coworkers, so maybe this is already my "fun" job.

To answer the OP's question, it's just a math problem.  I'd want enough in my investments to cover about 90% of my current spending levels, with the expectation that the "fun" job would cover at least 10% of my expenses.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Prairie Stash on May 01, 2017, 03:31:28 PM
I'm not sure I understand. How much would I need in the bank to only work 'fun' jobs?...and...what? Still have a X% savings rate?  Still make $X per year?

Hmm. Let me rephrase: how much would you need to have in the bank if you had to retire on it in 20-40 years? Knowing that you'd survive on your fun income in the meantime.
Rule of 72: take 72 and divide it by the expected stock market return (7%) to get the number of years it takes for money to double: 10. To retire in 20 years you need 1/4 of your final stash. In 40 years you need 1/16 now. Theoretically a newborn could could have 1 million at age 50, if the parents invest $31,250.

Once you hit 50% of your total you can let it grow for 10 years, without any more savings, and retire today if you can get enough to live off in between. I'm at that point (roughly) where if I never save another penny I should be able to coast into FIRE. Currently I work to bring the 10 years down to a much smaller time frame.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: lifejoy on May 01, 2017, 04:23:44 PM
I am so glad I saw this thread. I have been grappling with this idea for a while, but now it has been clearly and simply laid out in front of me. I plan to always work at least part-time or seasonally because I enjoy the social aspects of my fun jobs. I was not entirely sure how to work this into my FI plans.

$300k today would be enough for me to live off of my side gig income and be FI in about 12 years. That is a very motivating figure considering how much I enjoy my side gigs!

I think we are cut from the same cloth :)
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: lifejoy on May 01, 2017, 04:26:14 PM
Personally, while having a "punch the timeclock" type of job with fixed hours and little responsibilty might be appealing for a day or so, I think I'd be more disappointed in myself for earning far below my potential.  If I am going to work, I am going to make as much money as I possibly can doing it.  I generally enjoy the challenge of my job and the vast majority of my coworkers, so maybe this is already my "fun" job.

To answer the OP's question, it's just a math problem.  I'd want enough in my investments to cover about 90% of my current spending levels, with the expectation that the "fun" job would cover at least 10% of my expenses.

I am quite different than you. I have worked lower-wage jobs that I found to be so fun, I would often think to myself "Oh man, I would do this for free!"

So it is just a perk that it actually pays! And for me it would be like a hobby. And if you're curious, it is selling engagement rings. The customers are so happy and it is so fun! And who am I to judge how people spend their money? I just want to help them get an item they love :)
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: shanghaiMMM on May 01, 2017, 10:24:06 PM
I like this idea. A lot!

I like my job, but I don't love it. It pays well enough (by normal standards anyway, not compared to some salaries I see here! But I digress...). My job also often leaves me quite exhausted.

We just had a long weekend where I did nothing but bike rides, went to a free music festival and generally relax with friends and loved ones. It was great.

So anyway, in 2 years my DW and I should be around $450,000 if we carry on our current rate. The idea that I could quit at 32 and earn less for 10 years and then be left with $900,000 is really quite appealing.

I guess I have 2 years to work out a fun hobby that I can make money from!
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nobody123 on May 03, 2017, 08:25:47 AM
Personally, while having a "punch the timeclock" type of job with fixed hours and little responsibilty might be appealing for a day or so, I think I'd be more disappointed in myself for earning far below my potential.  If I am going to work, I am going to make as much money as I possibly can doing it.  I generally enjoy the challenge of my job and the vast majority of my coworkers, so maybe this is already my "fun" job.

To answer the OP's question, it's just a math problem.  I'd want enough in my investments to cover about 90% of my current spending levels, with the expectation that the "fun" job would cover at least 10% of my expenses.

I am quite different than you. I have worked lower-wage jobs that I found to be so fun, I would often think to myself "Oh man, I would do this for free!"

So it is just a perk that it actually pays! And for me it would be like a hobby. And if you're curious, it is selling engagement rings. The customers are so happy and it is so fun! And who am I to judge how people spend their money? I just want to help them get an item they love :)

I have a high paying fun job now where I work in air conditioning and don't lift heavy objects, so going back to being a stockboy or mowing lawns or some other job I loved at the time I had it would seem like more of a waste of time to me now.  The drop in pay and anxiety about wasting my talent earning potential would more than outweigh any mental health benefits of not being accountable for anything of consequence.  Everyone is wired differently though, so if you love doing the enagement ring thing, more power to you.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: lifejoy on May 03, 2017, 08:37:42 AM
Personally, while having a "punch the timeclock" type of job with fixed hours and little responsibilty might be appealing for a day or so, I think I'd be more disappointed in myself for earning far below my potential.  If I am going to work, I am going to make as much money as I possibly can doing it.  I generally enjoy the challenge of my job and the vast majority of my coworkers, so maybe this is already my "fun" job.

To answer the OP's question, it's just a math problem.  I'd want enough in my investments to cover about 90% of my current spending levels, with the expectation that the "fun" job would cover at least 10% of my expenses.

I am quite different than you. I have worked lower-wage jobs that I found to be so fun, I would often think to myself "Oh man, I would do this for free!"

So it is just a perk that it actually pays! And for me it would be like a hobby. And if you're curious, it is selling engagement rings. The customers are so happy and it is so fun! And who am I to judge how people spend their money? I just want to help them get an item they love :)

I have a high paying fun job now where I work in air conditioning and don't lift heavy objects, so going back to being a stockboy or mowing lawns or some other job I loved at the time I had it would seem like more of a waste of time to me now.  The drop in pay and anxiety about wasting my talent earning potential would more than outweigh any mental health benefits of not being accountable for anything of consequence.  Everyone is wired differently though, so if you love doing the enagement ring thing, more power to you.

You just described your job as "fun" and "high paying". No wonder you don't want to mow lawns! ;)
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: lifejoy on May 03, 2017, 09:33:41 AM
Maybe a better way to word this is, assuming your expenses are the same at a high-paying job you hate and a low-paying job you love, how much does the low-paying job income reduce your required nest egg for retirement?

Right now, I'm targeting a $625k nest egg because I'll already have over $10k / year in rental profits. But my nest egg is $400k shy. But if I took a fun job that paid net $20k / year, it would reduce my nest egg target by... $500k (25x annual expenses)! And I could all but "retire" today (to a fun job.)

That IS a good way to phrase it!

But I'm realizing that it puts a lot of pressure on the fun job remaining fun.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: scantee on May 03, 2017, 10:00:00 AM
$300k. I should be there within the next year and I am looking to transition to consulting, a new fun job, side hustles, or just reduce my current position to three days a week (which would allow me to keep all of my cush benefits). I'm also currently partnered, but we have separate finances, and my partner has a similar amount in savings which helps to make the situation seem more doable than it would if I were single.

My only hesitation about going forward with this plan is that I have become sort of addicted to saving after so many years focused so heavily on it. I don't think I'll be able to completely give up my savings habit after I downshift.  Saving around $12k a year is the minimum I'd feel comfortable with. 
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Cookie78 on May 03, 2017, 11:47:55 AM
I have a similar plan, but I'm not very certain of the target amounts.

The difference is that I don't want to HAVE to work my fun job. I want to do casual, seasonal, or temp jobs here and there and find other little passive income sources, but I don't expect that they will cover my expenses, EVEN THOUGH my FIRE phase 1 plan for the first 10 years is to live really inexpensively. Nomadic, rural, camping, etc.

The plan is to build a stache of $625,000, live on 2% give or take for 10 years while I supplement with fun jobs.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Ocinfo on May 03, 2017, 04:08:20 PM
I posted earlier about once you have $500k, you're basically set (assuming you're relatively young and FI number is $1 to $1.5 million). Here's a simple way to think about this approach.

Once you're 50% to your FI number, you're 10 years from FIRE based on average annual returns in the 7% range and no additional contributions. Odds are low that people on here won't contribute to savings over that 10 year period, which helps make up for a below average 10 year return.

I've found personally that, as I've approached this NW range, I'm far more relaxed. The hard part is over and it's just a question of time...


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Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nobody123 on May 04, 2017, 08:40:08 AM
I posted earlier about once you have $500k, you're basically set (assuming you're relatively young and FI number is $1 to $1.5 million). Here's a simple way to think about this approach.

Once you're 50% to your FI number, you're 10 years from FIRE based on average annual returns in the 7% range and no additional contributions. Odds are low that people on here won't contribute to savings over that 10 year period, which helps make up for a below average 10 year return.

I've found personally that, as I've approached this NW range, I'm far more relaxed. The hard part is over and it's just a question of time...


Sent from my iPhone using Tapatalk

That's pretty much my view on it as well.  I was explaining to my wife that we are in pretty good shape for me to ER in my 50s without reducing our standard of living and still paying for the kids' college.  Unfortunately, my wife interpreted that as "we can start saving less and spend more now"... 
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: FLBiker on May 04, 2017, 12:14:01 PM
I've thought about this, and I don't know exactly what my number is, but I suspect I'm there.

I'm 40, DW is 37, and DD is 2.  We've got ~$480K in retirement accounts, and another ~$100K in 457/taxable.  If I project out at 5% above inflation per year for the next 20 years on that retirement total, I get over $1.2M, which is $50K per year at 4%, which is plenty.

So I think if we just "break even" for the next 20 years, we're good (feel free to correct my math).

When DD is a bit older (say in 3 years) I think we might do some experimenting.  For example, I might try to reduce my hours, or change to a 9 month teaching gig, or we could go work overseas, etc.  Or maybe I'll try some other career entirely.  We shall see.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: tarheeldan on May 04, 2017, 12:21:06 PM
It doesn't take much if your expenses are low. According to my dashboard, I'm there (see "retire on current NW" ; annual expenses of ~19k, NW of ~160k).
https://www.dropbox.com/s/y3v1iwj78d7auiz/dashboard.png?dl=0
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nereo on May 04, 2017, 12:23:02 PM

How much would you need in the bank to let yourself work fun jobs for the next 20 years?

This is a rough approximation of our plan.  Anything over $250k and we'll feel comfortable with our decision
A few details:
our annual spending is <$30k and we both work.  Meeting that target (even part-time) should not be difficult.
In 20 years with no additions we expect our savings will be between $600k and $950k (growing at 4.5 - 7%).
In all likelihood we'll still contribute enough to max our IRAs

Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Retire-Canada on May 04, 2017, 02:35:18 PM
Hmm. Let me rephrase: how much would you need to have in the bank if you had to retire on it in 20-40 years? Knowing that you'd survive on your fun income in the meantime.

Well if I wanted to FIRE in 20yrs I'd need ~$400K which at say 5% would give me $1.1M in 20yrs. If I had 40yrs than I'd need ~$150K to reach that $1.1M.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: DebtFreeinPhilly on August 24, 2017, 01:56:14 PM
Along this same line of thinking, does anyone know how to calculate the IRS Life Expectancy payout for 401K/TSPs?

I am a US federal employee, age 36, will have 20 years of service at 43, and currently have $266k in the TSP. At current contribution rates and 7% return, at 43, I will have $636k in my TSP. If I "retire" from the government at 43, I can elect to have a monthly payment according to the IRS LIfe Expectancy tables. I just can't figure out that payment amount.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: des999 on August 25, 2017, 07:40:02 AM
we plan to do this once we get around 600-700k, but with healthcare up in the air, it makes it much more difficult to look at seriously.  I have a good megacorp job that has good healthcare, but I have a child with a pre-existing.  So, my 'fun' job that I pursue will probably have to be one that offers good healthcare for part time.  Guess I'll be having fun drinking coffee every day at Starbucks  :)

Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Lady SA on August 25, 2017, 10:59:41 AM
Our plan is to do just this. Save up $500k by 30, then don't touch it as we downshift to have kids. DH would go down to a part-time schedule to cover bills while our stash doubles in ~10 years. We're generally following the rule of 72 (mentioned above), but this strategy allows for some flexibility if we run into a few bad investment years (just continue finding work that brings in like $20-30k per year--between the two of us, that's doable even if we are desperate).

Our main driver for this strategy is we want lots of quality time with our children when they are small, and DH likes his job and is in an industry where he needs to have at least a part-time job to stay relevant and on top of the changing landscape. If he took a few years off to be with kids, it would be extremely hard for him to break back in. Downshifting to a part-time job is a good compromise, and leaves open the possibility of picking up more hours once kids are older (and padding our stash with the increased salary), plus we would get health insurance from his job.

Me, I really love my job and my team, and I'm in a really great company, but family is more important to me. If my company lets me take a sabbatical after my children are born and then a part-time schedule/salary after that, then I'd love to stay. But if not, then we will have the FU money for me to walk away happily. Then my dream is to pick up seasonal work at a garden center or something, not because we need it, but just for some adult interaction and projects.

EDIT:
To run some numbers, the rule of 72 states that on average, an investment will double every 10 years or so if you LEAVE IT ALONE for the entire growth period by covering your expenses with other income. So, you can become a millionaire by 60 if you:
stash $125k by 30
stash $250k by 40
stash $500k by 50
stash $1mil by 60

Which would still set you to retire before the average retirement age. But we're not interested in working to sustain ourselves until 60, so we're going for the accelerated version:
stash $500k by 30 --> $1mil by 40, give or take a few years. Any extra income goes to pad this stash, plus I can see us continuing to work for fun beyond those 10 years.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Finances_With_Purpose on August 29, 2017, 04:07:50 AM
This is an interesting thread: we're considering the same thing too. 

We're not quite there yet, so I haven't gotten detailed with the calculations, but I have observed that many simply adjust the SWR to 5%+ if the assumption is that you'll continue covering part of your expenses (i.e., less stash required).  JL Collins discusses something along those lines, for instance. 

As for us, I now wonder what our actual stash would need to be.  I've realized that I can likely make a decent chunk of our expenses with a tiny fraction of time each year.  I suspect if I pushed it, I could make even more, maybe all of our expenses (with relatively few hours).  If we retire, I would definitely continue it regardless, which reduces some financial pressure.  I'm using it now to boost our savings, but eventually, we'd rely upon it more to live. 

Now I'm eager to do some projections and see just where that would put us...

I'm eager to see what calculation methods you guys use.  Just roughly estimating, I'm guessing we're not too far out from being at this phase - we'll need to roughly double our current savings. 
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: happy on August 29, 2017, 05:45:51 AM
If I worked to cover my expenses I could retire now.I'm in my late 50s, so I really want to stop work completely.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: fatcow240 on August 29, 2017, 08:02:46 AM
I think our numbers are similar to yours.  Our FIRE number is 600k + house.  A house would be between 200k to 250k, so about 800k.  My wife is currently staying home with the kids, working about 10 hours a week from home.  Her degree is in teaching, and she wants to teach more.  With this, our expenses would be covered, but without much room for savings.  I believe having 600k would grow enough on its own.  Having the FU money will allow her to hold out for an optimal job at an ideal location.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: therethere on August 29, 2017, 08:41:36 AM
My "slow-down" number is as follows

550k in retirement accounts (covers 60+ retirement  for DH and I in full)
100k in other accounts (for emergencies, house downpayment, opportunity fund, sabbatical fund)
 + paid off student loans

This is for around 55-60k in spend annually. Plan would be to work PT or new FT to cover expenses after quitting our career track jobs. We would likely cut expenses if we were able to live off of working way less.

Problem is that I want to slow down NOW. And we are a few years away from this number...
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: mcneally on August 29, 2017, 11:00:07 AM
Along this same line of thinking, does anyone know how to calculate the IRS Life Expectancy payout for 401K/TSPs?

I am a US federal employee, age 36, will have 20 years of service at 43, and currently have $266k in the TSP. At current contribution rates and 7% return, at 43, I will have $636k in my TSP. If I "retire" from the government at 43, I can elect to have a monthly payment according to the IRS LIfe Expectancy tables. I just can't figure out that payment amount.

I used this (platform.grbinc.com) which tells me that based on a current $209k balance my annuity would be $242/month or $2,904 per year, which is 1.4% of the balance. I assume this has to be based on an immediate annuity at my age of 31 and not what I'd get if I were 57 or 62, but I highly doubt an annuity is the way you want to go.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: TVRodriguez on August 29, 2017, 12:12:20 PM
I guess DH and I are pretty much there.  We each work for ourselves, and we enjoy our work for the most part.  We each work less than full-time.  We could make a lot more money if we worked full-time, but we like having the extra time each week to spend with our kids.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Goldielocks on August 29, 2017, 01:17:48 PM
This is great post!

I had the same idea, saved the base money, now have been FIRED (my way) since March.   

The key to this, is not just the interest rate -- it is how many years you have before you start to pull from your saved money.
I have 15 to 20 years for the money to grow.   That made the amount needed quite small compared to what I thought.   The trick is earning enough / spending low enough that I don't have to touch it.

Because I was saving so much previously, my actual monthly spend is quite low, and now without needing to add to the savings, it is quite easy.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: moonpalace on August 29, 2017, 01:50:30 PM
Maybe it's a lack of creative thinking on my part, but this is an absolutely thrilling, mind-blowing thread to me.

I had really been trapped in a binary view of life: (1) work and save like hell for a while; then (2) stop working entirely and live off the savings.

But this suggests a path that actually sounds a lot more attractive to me. (1) work and save like hell for a less-long while, then (2) work a lot less hard for a while, then (3) live off the savings later in life.

Also sounds like a gentler transition, and like a longer time of enjoying life more.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Finances_With_Purpose on August 29, 2017, 03:16:54 PM
Maybe it's a lack of creative thinking on my part, but this is an absolutely thrilling, mind-blowing thread to me.

I had really been trapped in a binary view of life: (1) work and save like hell for a while; then (2) stop working entirely and live off the savings.

But this suggests a path that actually sounds a lot more attractive to me. (1) work and save like hell for a less-long while, then (2) work a lot less hard for a while, then (3) live off the savings later in life.

Also sounds like a gentler transition, and like a longer time of enjoying life more.

That about sums it up.  This is, in fact, why I began blogging, and what I devote it to: organizing one's finances to achieve life purpose, whether that's a more fulfilling job, no job, etc. - finding ways you can live a more fulfilling life.  (Which typically involves contributing to others' lives.)  This thread makes me want to continue exploring it, and write more about it - very encouraging, folks! 
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Khan on August 29, 2017, 06:39:55 PM
Also sounds like a gentler transition, and like a longer time of enjoying life more.

See also:
https://livingafi.com/2015/08/04/taking-a-gap-year/
https://forum.mrmoneymustache.com/post-fire/early-retirement-vs-serial-mini-retirements/
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nottoolatetostart on August 30, 2017, 04:55:00 AM
We are doing this. We are FI, but was planning on DH working a couple more years to further cushion our retirement. Lately, every day at his former job has become such a dredge for him. Negative nasty people, felt like he was not making a difference, etc really bothered him. Here's the reality: DH is just not wired to not work. Lots of double negatives in there, so to say another way, DH will probably always work outside the home and I needed to accept that. I, on the other hand, would be happy to never work again.

DH just wrapped up his high stress, long hours $200k/yr job. He walked away from extra bonuses, stock options, etc. He is now doing something he LOVES but it just barely pays our bills. He loves it. He can't wait to wake up in the morning because he wants to get back at working at this new gig. He has a lighter schedule, more predictable, just a few days a week, lots of time off. He loves it. People he works with love their job too and it is such a positive environment. I can see DH doing this for years and years. He has more energy and his former job just drained him. Mo' money mo' problems, as they say.

So, for all intents and purposes, I would say we wrapped up our retirement savings goals and will just spend whatever he makes going forward. Begin our Roth conversion pipeline in 2018 and pay those extra taxes now while we still have our 2 little tax exemptions, otherwise known as kids. In a few years, we will be wealthier than we could spend. Maybe he worked too long and could have pursued the path you are thinking of sooner.

I hope this story has helped. Life is very short. It's not worth the stress to be miserable. If DH had known he would have had this much fun doing this job, I guarantee he would have cut even more stuff sooner to make this job a reality. It took him a long time to realize that spending money does not make you happy, but for him, it is doing work you truly love that makes him happy.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: DebtFreeinPhilly on August 30, 2017, 08:07:33 AM
Along this same line of thinking, does anyone know how to calculate the IRS Life Expectancy payout for 401K/TSPs?

I am a US federal employee, age 36, will have 20 years of service at 43, and currently have $266k in the TSP. At current contribution rates and 7% return, at 43, I will have $636k in my TSP. If I "retire" from the government at 43, I can elect to have a monthly payment according to the IRS LIfe Expectancy tables. I just can't figure out that payment amount.

I used this (platform.grbinc.com) which tells me that based on a current $209k balance my annuity would be $242/month or $2,904 per year, which is 1.4% of the balance. I assume this has to be based on an immediate annuity at my age of 31 and not what I'd get if I were 57 or 62, but I highly doubt an annuity is the way you want to go.

Thanks for the help!
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: rubybeth on August 30, 2017, 08:14:45 AM
I think this is basically my plan, to be able to go to part-time work in my same field (either negotiate for fewer hours or just move to a different job), or allow my husband to go part-time, or both of us go part time and not need to stash during that time as our stash grows on its own without additional contributions while also keeping our tax bracket lower.

I think somewhere between $500-$800k would do it, if we were able to not touch the stash. There are a lot of unknowns at this point. One thing that would help is if one of our jobs would cover medical for both of us--that would be worth a heck of a lot more than the actual paycheck.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: trollwithamustache on August 30, 2017, 09:17:40 AM
This troll believes in the stock market.

500k in the bag by age 40 was my number for working until 62 but not needing to save  any more after that point. I kept savings because I would like that number much higher to pull in FI to 55 and with kids the wife and I aren't 100% sure of that number. 

part time/selective contracting employment can be a lot more enjoyable and enjoying life is the point isn't it?  I won't go back to full time salaried ever ever again.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: boarder42 on August 30, 2017, 11:37:05 AM
I can retire comfortably on a million.

500 grand invested over a 20 year period should yield returns of about 1.1 million inflation adjusted . . . So, my number would be about 500 k to retire while working fun jobs.

what return are you using b/c over 20 years that should be closer to 2MM inflation adjusted at 7%.  in 10 years you'd hit your 1MM number
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: arebelspy on September 12, 2017, 10:32:54 PM
Interesting questions. 

Regarding the initial one "how much do you need saved to supplement fun gigs w/ a 4% WR" (I'm summarizing), I think we could semi-ER with only fun gigs and live just off that, so $0 saved first?

As far as the second question (how much saved to let compound over 20 years so you can work just enough to cover expenses and let the stache compound to full FI in 20 years), hmmm.

Let's say 1MM in today's dollars, 7% inflation adjusted return.  If we had $0 to start out with, side gigs would need to earn us a $24.4k/yr surplus. If side gigs gave us no surplus, we'd need about 258k right now.

So somewhere between those numbers, likely.  Maybe 100k saved first?

Shockingly low numbers either way. Somewhere between $0 and $200k would be plenty to semi-ER.

...yes, we really should have ER'd sooner.  :)
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nereo on September 13, 2017, 05:36:35 AM
Quote
yes, we really should have ER'd sooner.  :)

A fascinating statement from a couple that ERed in their early 30s...

Also feeling more confident about our own "glide into FI" plan now.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: GuitarStv on September 13, 2017, 07:55:16 AM
I can retire comfortably on a million.

500 grand invested over a 20 year period should yield returns of about 1.1 million inflation adjusted . . . So, my number would be about 500 k to retire while working fun jobs.

what return are you using b/c over 20 years that should be closer to 2MM inflation adjusted at 7%.  in 10 years you'd hit your 1MM number

4%
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: trollwithamustache on September 13, 2017, 08:06:45 AM
 

Regarding the initial one "how much do you need saved to supplement fun gigs w/ a 4% WR" (I'm summarizing), I think we could semi-ER with only fun gigs and live just off that, so $0 saved first?

That would be the dirty secret of a little frugality. You can't share that on the internet!
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: 2Birds1Stone on September 13, 2017, 08:40:58 AM
I recently made a post about this in my journal here.

My current stash covers about $1100/month, so I would need another $900/month after taxes to maintain current lifestyle.

$207/week after taxes can easily be earned averaging 2-3 days a week at a store like Trader Joe's, where the hours are flexible (first shift is 4AM-Noon, last is 4 PM to midnight)

They also offer a $.60/hr raise every 6 months if you are a good employee.

If I didn't want to tap into my nest egg and let it grow in the background, I would need to earn $2k/month after taxes. Which would require full time low skilled work.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: arebelspy on September 13, 2017, 10:01:59 AM
 

Regarding the initial one "how much do you need saved to supplement fun gigs w/ a 4% WR" (I'm summarizing), I think we could semi-ER with only fun gigs and live just off that, so $0 saved first?

That would be the dirty secret of a little frugality. You can't share that on the internet!

Haha, totally!
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: StarBright on September 13, 2017, 10:30:58 AM
I've thought about this. Currently I'm 30 and my wife is 28. If my wife and I were to try this approach, and planned to work only at jobs that we enjoyed for a period of 20 years, that take us to 50years old, and our future kids would be 18+.

I'd like to start the adventure with $300k in investments. Such that it has time to compound. In 20 years at 7% interest, our "Stache" would reach 1.2m, and we'd still be much younger than the average retiree.


Our current plan is to do something like this (we are in our mid 30s). DH is a swami that never wants to retire and I am in a great, flexible job but they've burned me out and I want to make a change. We are getting our investments to 300k and then I'll switch to part-time, or SAHM, or make a career change. DH has a mandatory retirement contribution as well so our stache will continue to grow until whenever.

I'm feeling pretty good about this plan right now.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: matchewed on September 13, 2017, 10:35:02 AM
My GF and I are suddenly very high earners (IMO) within the last year with a three family rental property (2 rents covering all expenses while we live in there). I've been guiding her into the concept of FIRE since I started dating her so that she'd know more about one of my goals.

When we were talking one time about such things I was running her through various scenarios. She'd rattle off variable changes and I'd give her what our success rate was given the variables.

She asked what if we made $30k/yr for the rest of time? I told her we wouldn't have to save a dime at that point. All our savings would be pure excess. This blew her mind. It further blew her mind that all we'd need is to each have a $10k a year job with our current stache and passive income in order to stop.

If I understand the question I guess that answers it for me. We're at that point now where we could work some fun little jobs, my GF already has one on the weekends. So $250k in the bank does it for me.

Maybe I'm looking at it with some particularly rosy glasses but I think I did like those lower responsibility jobs. They lent a greater amount of chatting with coworkers and customers. The stress was a great deal less I believe.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: arebelspy on September 13, 2017, 10:36:48 AM
But is Trader Joe's a "fun job?"

Seriously, while I was mildly happy to work at a gas station in my teens, how would I feel making well under $20/hr now to do something like that, after experiencing the corporate fire hose of cash flow?

Definitely. I can't imagine going into a job like that right now and dealing with customers.  I feel like within a short amount of time I'd be going "I'm FI! I don't need this!" (Though I guess in this scenario I would, which would suck. But picturing it now, in my current situation.. ugh. :P)

But some might enjoy it, and more power to them. We all have different things we enjoy.

More impotantly, are there any hobbies you might explore that would be fun and could earn money.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: moonpalace on September 13, 2017, 10:40:56 AM
Definitely. I can't imagine going into a job like that right now and dealing with customers.  I feel like within a short amount of time I'd be going "I'm FI! I don't need this!" (Though I guess in this scenario I would, which would suck. But picturing it now, in my current situation.. ugh. :P)

But some might enjoy it, and more power to them. We all have different things we enjoy.

More impotantly, are there any hobbies you might explore that would be fun and could earn money.

I can't imagine going back to working retail, either, but I can *definitely* imagine just cutting back my existing job to (very) part-time and having that be pretty darn amazing.

Or starting a little climbing gym and maybe clearing $20k/year . . . or something else like that. Or work full-time, but only in odd-numbered years!

To me, the power of this line of thinking is not that you get to go pump gas, but that you have a tremendous array of options once you only have to earn a little bit.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nereo on September 13, 2017, 11:42:59 AM
Just a thought:  I've found that I enjoy a job far more when I really don't need it.   Several times in my life I've had jobs that I "needed" to make ends meet. It was a huge drag.  But once my situation changed I liked the job a lot more.  For example, I picked up a job in college at a seafood wholesaler to pay my tuition.  It was awful.  But then I got a scholarship but kept the job - within a few weeks my opinion of the job changed dramatically.  I also worked retail when I needed extra money and hated it.  Then I was begged back by my former manager for the holiday season and had a really fun time, in part because I didn't give a damn if I was meeting my 'metrics' or not and everything i earned was going straight to savings.  Ironically - I was a better employee the second time (though whether that's due to experience or attitude I can't say).
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: trollwithamustache on September 13, 2017, 01:07:25 PM
But is Trader Joe's a "fun job?"

Seriously, while I was mildly happy to work at a gas station in my teens, how would I feel making well under $20/hr now to do something like that, after experiencing the corporate fire hose of cash flow?

More impotantly, are there any hobbies you might explore that would be fun and could earn money.

Not TJs, but step into any WestMarine store and a very happy semi-retired clerk will chat boating with you for far longer than you probably have time for.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Finances_With_Purpose on September 13, 2017, 04:43:27 PM
Interesting questions. 

Regarding the initial one "how much do you need saved to supplement fun gigs w/ a 4% WR" (I'm summarizing), I think we could semi-ER with only fun gigs and live just off that, so $0 saved first?

As far as the second question (how much saved to let compound over 20 years so you can work just enough to cover expenses and let the stache compound to full FI in 20 years), hmmm.

Let's say 1MM in today's dollars, 7% inflation adjusted return.  If we had $0 to start out with, side gigs would need to earn us a $24.4k/yr surplus. If side gigs gave us no surplus, we'd need about 258k right now.

So somewhere between those numbers, likely.  Maybe 100k saved first?

Shockingly low numbers either way. Somewhere between $0 and $200k would be plenty to semi-ER.

...yes, we really should have ER'd sooner.  :)

You're inspiring me to do it sooner.  Though I really wonder how I could lower housing costs by enough to make that leap.  We, too, could be semi-ER with side biz income that would continue supporting us - and absolutely love life.  I'm constantly debating how much we'd need to have saved in order to pull the trigger. 

But for now, we are doing higher-risk things, like taking lower-paying gigs that are fun, starting our own businesses, and the like - and I'm confident that one of these areas will pan out enough that the problems will probably solve themselves.  Meanwhile, we're finding more ways to make money by doing what we love. 

Plus, this community is amazing: constantly learning more.  (You tipped us off to tradelines, for instance, and I signed up yesterday.)  And constantly adding value to our lives as well as others' lives.  I use a good chunk of what I learn here (where appropriate) in my financial planning meetings. 
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: tj on September 13, 2017, 09:12:19 PM
It doesn't take much if your expenses are low. According to my dashboard, I'm there (see "retire on current NW" ; annual expenses of ~19k, NW of ~160k).
https://www.dropbox.com/s/y3v1iwj78d7auiz/dashboard.png?dl=0

That's over a 10% SWR. Is that something you'd actually do?
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: MaaS on September 14, 2017, 07:52:44 AM
Cool thread, this is basically my plan as well.  I'm already self-employed as a consultant, so ramping up and down is pretty straight-forward.

A big factor for me is a more favorable take home pay percentage.  It's absolutely a whiny "first world problem," but the reality is that with a strong income, two days of your life each week go towards taxes.  With the wealth creation happening in the background and simply working to pay bills, you suddenly keep almost everything.  Also, health insurance is dirt cheap with an income of under 50k.

It's a very compelling life model if you have the fortune and focus to sock money away early!


Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: BeautifulDay on January 13, 2018, 11:31:35 AM
I like this idea. A lot!

I like my job, but I don't love it. It pays well enough (by normal standards anyway, not compared to some salaries I see here! But I digress...). My job also often leaves me quite exhausted.
+1

DH is already in his ideal low stress job.  I work for same company and like it a lot but my job can be very stressful at times.  I also make 2x as much as he does.

So if DH were to stay in his job for 10 years I could take a part time job making $1000 or less a month and we would cover expenses.  Or I could bring in a bit more and DH negotiate part time role at work.  Would need $600k to make that work for 10 years. Or $300k for 20 years. It'll take several years to get 300k or 600k. 

Or we can stick to our 13 year plan.  I think this is more appropriate for us.  But it is nice to have other options if we really need a change later.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: FIRE_at_45 on January 13, 2018, 11:44:13 AM
Iím not doing this so I am posting to open my mind to other options ;)
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Retire-Canada on January 14, 2018, 06:49:17 AM
I'm working 24hrs/week Mon-Wed at a low[-ish] stress job. While my portfolio keeps growing without major new additions. One thing I'll point out is that you don't necessarily need a different job. If you are working 40-60hrs/week and not loving your work you may well find the same job part-time could be great.

With a 50% savings rate you can work half as many paid hours and still save a little due to lower taxes.

 
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: sparkytheop on January 14, 2018, 07:43:45 AM
Along this same line of thinking, does anyone know how to calculate the IRS Life Expectancy payout for 401K/TSPs?

I am a US federal employee, age 36, will have 20 years of service at 43, and currently have $266k in the TSP. At current contribution rates and 7% return, at 43, I will have $636k in my TSP. If I "retire" from the government at 43, I can elect to have a monthly payment according to the IRS LIfe Expectancy tables. I just can't figure out that payment amount.

I realize this is an old question, but go to tsp.gov, to "planning and tools", then "retirement income calculator".  Fill in the info, and the results will show various tabs.  "Overview" and "TSP monthly payments" should show a column for "Life Expectancy", with each annual payment listed through the age you select.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: sparkytheop on January 14, 2018, 07:57:44 AM
For me, I don't want a "fun" job.  I pretty much have the best gig I can imagine right now, and I am well compensated for it (99% stress-free, but that 1% is where we really earn our money).  I could see cutting down to half time if it were allowed, and I'd still get the benefits (health care at retirement age, pension, immediate withdrawal from my TSP, etc), but I can't see quitting something that pays this well, is this "easy", and gives me time to work on my own stuff (I spent a few hours hand quilting tonight while I had to sit in a certain location to push a few buttons, wait, push a few more buttons).

I've been working since fifth grade, and having a job is just not "fun" to me.  Fishing is fun, quilting is fun, hiking is fun, going to the theater is fun, travel is fun, mindlessly doing nothing is fun.  Work is not fun.  I can have fun at work, and often do, but work is work.  I'm one of those people who enjoys things most when I don't have to do them.  Loved raking leaves as a kid, but the second I was told to do it, or how to do it, I hated it.  I love making quilts, but if someone wanted to pay me to make one for them, I'd lose interest, especially if it wasn't my taste (it took me forever to make a simple quilt for donation that had pink as a main color.  I hate pink and it ended up taking me 10 times as long to finish that quilt, even though it was about a tenth of the work when it came to cutting, sewing, etc.  I just didn't enjoy it.)

So, at least right now, there is no magic number.  I want to do what I do, as long as it stays tolerable (decent boss, and not exposed to too much of the political bs, no one stabbing me in the back to get a promotion, great schedule, etc).  Then I want to retire and not have to try to earn money ever again.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: SpareChange on January 14, 2018, 08:02:57 AM
I'm working 24hrs/week Mon-Wed at a low[-ish] stress job. While my portfolio keeps growing without major new additions. One thing I'll point out is that you don't necessarily need a different job. If you are working 40-60hrs/week and not loving your work you may well find the same job part-time could be great.

How long have you been doing 24hrs? Curious to know if you still have a desire for RE when work has been pared down to pt? I'm planning to do something similar...drop down to two 8s in another year or so. I like my job alright, but I am a bit burned out. I do feel I might like it a lot more if it seemed more like a hobby haha.   
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Retire-Canada on January 14, 2018, 08:09:35 AM
How long have you been doing 24hrs? Curious to know if you still have a desire for RE when work has been pared down to pt? I'm planning to do something similar...drop down to two 8s in another year or so. I like my job alright, but I am a bit burned out. I do feel I might like it a lot more if it seemed more like a hobby haha.   

I started in July so I am at a bit over 6 months. Do I still want to retire? Yes for sure, but definitely the pain of continuing to work has been reduced by a huge amount. I have to leave myself detailed notes because by the time I get back to work after 4 days I have forgotten what the heck I was doing. If I hit 4%WR Monday I would start the process of stopping work. I'd like to travel more and having to be at a desk even 2 or 3 days a week is a drag.

If we were talking 1 day a week of work and it was flexible so I could say leave for 2 weeks and then do 2 weeks of 2 days/wk to make up the time...hmmmm...then I'd probably be okay working longer. However, my own personal definition of FIRE is working 25% FT or less. So I could do 8hrs a week of work on average and still be retired. Like you say at that level it's more like a hobby than a job. ;)

Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Chairman on January 14, 2018, 02:19:10 PM
A million bucks. Planning on doing exactly this.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Rubyvroom on January 15, 2018, 05:59:16 AM
I like hearing others' thoughts on this. As we get closer to FIRE I've been thinking a lot about this too.

At first I set a hard number of $1M for our FIRE goal and tried to project dates based on when we hit that number. The more I've read about withdrawal rates and the sequence of returns risk, the more flexibility I've introduced to that way of thinking and I think we'll be retiring closer to $800K (5% WR).

The tentative plan now is to have DH retire first, in October 2019, at a date triggered by our "free" 3-year auto lease expiring (paid for by his work) before we enter into another lease or need to purchase a second vehicle. We may have between $700K-$750K at that time (liquid, not including home equity). Depending on what the markets look like at that time, he will either be fully retired and start to get our house ready to sell, or he may pick up a small job near our home.

I will probably stay at work until that following spring 2020 when I receive a potential bonus and a raise (the raise impacts my vacation payout upon quitting). We may have between $825K-$875K by then. Now, if for some reason the markets had pushed our stash up into the $800K range by October 2019 and I am not going to get a bonus in the spring, I will absolutely retire at the same time as DH. We'll have to see how things shake out.

So I'm feeling far more comfortable with something around $800K (5% WR) rather than $1M (4% WR), knowing that in our situation, we have quite a bit of flexibility. In my line of work it's quite easy to pick up consulting gigs at a $40-$50/hr. rate, which I may pick up periodically to either push us over the $1M hump, to provide some "fun money," or to mitigate a poor sequence of returns either due to market instability or underestimating the cost of the health insurance debacle. To me, the extra 1.5 years or so of freedom are worth the 1% WR, and part-time consulting will be the perfect way to bridge the gap.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: homestead neohio on January 15, 2018, 07:14:19 AM
I hope my number for this is $600k because that's what I have and I'm making the leap in 2.5 months.  My plan was to work until my FI number, but changes in employment have forced me to look at this much sooner.  Because starting over in my current job at a new employer sounds awful compared to taking a number of jobs for a year at a time which would help me learn skills I value like large scale veggie production, orchard management, and community activism.  If I cover my family expenses for about 7 years, my stash should grow to my full FI number and I my "fun" jobs will be entirely optional, and I'll decide then if I continue or not.  I don't think I need some form of employment outside the home to be happy, as some have indicated.  However, when choosing what to do next, I think I can have a lot more fun at lower paid jobs I'm excited about than continuing to maximize income via the career I've been building for 18 years.  I'm burned out on that.  I probably could have done this sooner, but I'm also glad I'm not working another 3 years in the career job before realizing this is a viable option.  I am taking a year or two off before I start picking up fun jobs, though, to decompress and heal from my burnout.

I entirely agree with others who have said it is a more natural transition to FIRE than going hard 20+ years and FULL STOP, which is what my path would have looked like.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: blinx7 on January 15, 2018, 07:26:19 AM
I am conservative and raising a family in a VHCOL city.  So $1.75 million plus paid off house plus enough in 529 that I can expect to reasonably cover state university for each child (assuming investment returns but also tuition rising).  No pensions and would be walking away from a lucrative and stable job so need to make sure it can stick. 

On a per person basis though that is not that much different than some of the numbers others are posting for singles or DINKs.

We are not there yet but it is not so far off as to be unrealistic.   
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: kaetana on January 15, 2018, 07:41:41 AM
We are doing this. We don't have enough to completely retire right now, but I am definitely one of those people who think that either of the normal options (work hard, save hard OR no work, live off savings) is a horrible prospect. Obviously this will change at some point, but I really think I will always do SOME sort of work. It's just a question of how much I'll earn from it. So we've chosen option 3. Currently my husband has retired and I am still working (a job that I love). Conservatively we will reach our FI figure in 10 years when I'm 42, assuming I keep making enough to cover our expenses. At that point I would be FI even if I never worked again (unlikely).

A few reasons why we've chosen this path:
1. My husband is 28 years older than me. I'm 32, but he is turning 60 this year, which means time with him is my number one priority.
2. We both have backgrounds in tech and have been able to earn incomes high enough to let us do a short burst of saving (about 4 years of slightly less travel than normal and cutting back on stupid expenses to get us to this point).
3. I love my job. I love my industry. I also have a few hobbies I'm extremely passionate about (foreign languages and writing) that I feel comfortable I could leverage to at least meet our expenses for the next 10 years, should I not be able to work in IT for whatever reason. Most importantly, tech and my hobbies are all particularly suited to remote work.
4. We're fortunate enough that we are able to move overseas (we are both multinationals) to further reduce our expenses if we needed to.
5. Right now we both stand to (legally) get pensions from two countries, not to mention other benefits if needed.
6. We love to travel.

Seemed like a no brainer for us. Until this thread I thought that this choice was incompatible with traditional Mustachian philosophy. Whether it is or not, I'm happy to see others are doing this too!
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: rubybeth on January 15, 2018, 10:18:27 AM
I am conservative and raising a family in a VHCOL city.  So $1.75 million plus paid off house plus enough in 529 that I can expect to reasonably cover state university for each child (assuming investment returns but also tuition rising).  No pensions and would be walking away from a lucrative and stable job so need to make sure it can stick. 

On a per person basis though that is not that much different than some of the numbers others are posting for singles or DINKs.

We are not there yet but it is not so far off as to be unrealistic.   

You'd still need to work part-time after having $1.75 million? Wow, I'd suggest moving to a lower cost of living area and working a fun job there instead so you don't need as much in order to only partially retire.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nereo on January 15, 2018, 10:31:58 AM
I am conservative and raising a family in a VHCOL city.  So $1.75 million plus paid off house plus enough in 529 that I can expect to reasonably cover state university for each child (assuming investment returns but also tuition rising).  No pensions and would be walking away from a lucrative and stable job so need to make sure it can stick. 

On a per person basis though that is not that much different than some of the numbers others are posting for singles or DINKs.

We are not there yet but it is not so far off as to be unrealistic.   

You'd still need to work part-time after having $1.75 million? Wow, I'd suggest moving to a lower cost of living area and working a fun job there instead so you don't need as much in order to only partially retire.
That was $1.75MM plus a paid off house + enough in 529s to pay for college for each kid.
That number floored me, too, assuming we're talking about USD.
If this were their ultimate, walk-away and never work again number I might understand, but for the OP....  yikes.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Samuel on January 15, 2018, 12:12:41 PM
I think this has been my unconscious plan all along, just never stated this explicitly. I've always been much more focused on the FI than the RE.

I really like the idea of making my primary target be a fail safe point,  the number at which I could downshift to a subsistence job and still coast to FI on a reasonable time frame. The full FIRE number is a secondary target, a best case scenario.

Is there a term  in the early retirement lexicon for this point or do we need to invent one?
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: never give up on January 15, 2018, 12:42:28 PM
That sounds like the point of FIRE inevitability. Iím the same. I enjoy the structure of work and being part of a team but FI really appeals just so you know you can leave at the drop of a hat. You never know when a reorg, a horrible boss, internal politics or redundancy is around the corner. None of that matters when FI.

Iím 40 and am likely to be able to take my company pension at 57 (Iím UK) so itís what combo of full time, part time or RE to adopt for this interim period of 17 years. I donít know yet but am working on it. Iím probably 8 years from full FI so full time work needs to exist for at least five of those years.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: trollwithamustache on January 15, 2018, 01:34:47 PM
I think this has been my unconscious plan all along, just never stated this explicitly. I've always been much more focused on the FI than the RE.

I really like the idea of making my primary target be a fail safe point,  the number at which I could downshift to a subsistence job and still coast to FI on a reasonable time frame. The full FIRE number is a secondary target, a best case scenario.

Is there a term  in the early retirement lexicon for this point or do we need to invent one?

We need to invent one. Its about frugality and simplicity but its not the classic program as any of the Gurus, MMM or Extreme Early retirement, ect have laid out.  There is this satisfied advanced mustachian term floating out there, but I don't get the feeling those people have a clear plan other than to keep accumulating. This isn't meant as a criticism.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: RichMoose on January 15, 2018, 01:59:43 PM
Is there a term  in the early retirement lexicon for this point or do we need to invent one?

We need to invent one.
Here's my first poke:
SRIWS - Semi Retired Individual With Savings/Stash
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: blinx7 on January 15, 2018, 04:41:05 PM
I am conservative and raising a family in a VHCOL city.  So $1.75 million plus paid off house plus enough in 529 that I can expect to reasonably cover state university for each child (assuming investment returns but also tuition rising).  No pensions and would be walking away from a lucrative and stable job so need to make sure it can stick. 

On a per person basis though that is not that much different than some of the numbers others are posting for singles or DINKs.

We are not there yet but it is not so far off as to be unrealistic.   

You'd still need to work part-time after having $1.75 million? Wow, I'd suggest moving to a lower cost of living area and working a fun job there instead so you don't need as much in order to only partially retire.
That was $1.75MM plus a paid off house + enough in 529s to pay for college for each kid.
That number floored me, too, assuming we're talking about USD.
If this were their ultimate, walk-away and never work again number I might understand, but for the OP....  yikes.

I think maybe I didn't fully understand the question the first time around. 

The number I quoted is basically our family's target FI number assuming literally zero lifestyle changes (mostly related to raising 2, and hopefully one day 3, kids in VHCOL-land, which we could easily change by moving to a different city but just would rather not at the present time).  I just intend to keep working in some capacity after FI, to keep active and build an extra margin of safety and that's part of the reason we aren't moving -- this is a good place to find interesting opportunities.  I get that I'll probably die with extra money on the table for grandkids education, charities, etc. but am OK with this.  The figure I cited is just basically my personal current working plan. 

I could probably downshift into either a relatively fun job, at least for me (e.g., 9-5 attorney for city gov't), or a non-fun part time job (e.g., overflow private practice work from friends at $200 per hour) right now and regardless of whether I saved anything and with no lifestyle changes still hit full FI well before normal retirement age from just growing existing assets.   

In terms of starting to live off assets (even at a 2% SWR) while working fun jobs, I get that it is mathematically possible but I am just not comfortable doing that.  I am totally on board with downshifting prior to FI and did so myself (biglaw to boutique) but the downshift was from a 67% savings rate to a 30% one -- not a shift that would involve touching any assets prior to FI.  Maybe if it were just me with no kiddos, but not if this is my family's well being I am responsible for.  I can't speak to other industries, but once you walk away from a lucrative private practice law job it can be hard to get it back so I am going to keep making hay while the sun shines.

Of course, if they kick me to the curb and I can't get anything else, then we are off to a two bedroom apartment near the beach in a LCOL state and I'll take it from there and could hang up my cleats now if need be.   
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: the_fixer on January 15, 2018, 09:18:17 PM
Thought is was called coast FI?

Our plan is to do something similar as of today my number would be $510k that would result in my somewhat comfortable 60k per year at 62 years old @ 4% SWR


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Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: expatartist on January 15, 2018, 10:22:09 PM
"Coast FI" sounds like a good description. What a great variety of lifestyle choices on this thread!
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nereo on January 16, 2018, 04:59:16 AM
Iíve heard ďGlide pathĒ...
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: kork on January 16, 2018, 07:07:09 AM
SWISS

Semi Working Individual with Savings/Stache
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: tj on January 16, 2018, 01:41:27 PM
Thought is was called coast FI?

Our plan is to do something similar as of today my number would be $510k that would result in my somewhat comfortable 60k per year at 62 years old @ 4% SWR


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4% of $510k is only $20k. Where's the other $40k coming from?
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: the_fixer on January 16, 2018, 01:58:23 PM
Magic pure magic :)

That magic is time in the market compounding.


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Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nereo on January 16, 2018, 02:10:53 PM
SWISS

Semi Working Individual with Savings/Stache

Well SWISS is a heck of a lot easier to say than "SRIWS", but we run the risk of people thinking we're from Switzerland....
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: FI4good on January 16, 2018, 02:59:40 PM
If i went back to my little house in France i was quite happy living on 100 euro's a week there , healthcare is a reciprocal arrangement with the UK system. So on paper i have enough to fire today with a huge margin in that scenario, Alas my stash is locked away in retirement accounts until I'm 57.

The job i do in the meantime is ok , they give me 14% if i pay 7% into my pension , 40% boost on buying shares (only 5% of my income can be used for this)

The stash i have now will be enough via compounding to live as i do in the UK when i hit 57 but i can't help but add to it because they're throwing free money at me and i want for nothing.

13 years 5 months to go..  i try hard to pretend to care and stay motivated at work , I have a 60-70% SR depending on the mathematics used and its not like I'm depriving myself.     

My plan at 57 is to buy a home in a rich, vibrant and arty area somewhere around the Mediterranean (after exorcising my travel bug) so i can hopefully meet other people who have also solved the money problem and are into more interesting things :)

Addendum, i will probably FIRE earlier but that will depend on the markets and post tax savings , i just keep stashing it away and when it feels right i'll FIRE . paying 20% income tax on the money to invest into a tax free wrapper called and ISA rather than wait 13 years and have it tax free via the pension is a trade off i revisit quite often .
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Apple_Tango on January 16, 2018, 06:20:37 PM
I love this question! Because once I'm FI I plan on working fun jobs and so it's interesting to theorize what would happen if I just skip the accumulation phase and go straight for fun. I'm not going to do it because I have a loan to pay off in the next 3-4 years.  Also there is a tradeoff for me- If I work just a bit harder at my less fun career to build my FI stache, I won't HAVE to work at all past age 35. All the fun jobs after FI will literally be no stress, all gravy. 

On the other hand, if I stop the career train right now and coast along and work only doing fun jobs (seasonal jobs at yellowstone,  working at a ski resort and getting free mountain time, working at a winery doing tastings, etc) then I will HAVE to work until I'm in my mid 60s. And i'm nervous about the future of US health care and potential future babies :) So like I said...i'm just going to work through until age 35 and consider that good enough :)

But enough jabbering, let's get to the numbers! Let's say all I did from today on was fun jobs, making fun money.  If I managed to make a net $25,000 and spend it all on living costs, I'd still be at 1.2 million by age 67. So that's a damn good feeling.  If I netted $25,000, spent $19,500 per year, and just contributed $5500 into a Roth IRA every year without fail until age 67.....I'd have just under $2.5 million waiting for me in the bank.

On the other hand if I go with my FI plan and save/invest until age 35, and THEN go on my whimsical fun job spree so I'm not even touching my stache and saving NO more money, I'll be at $6.5 million. If I keep investing $5,500 into a Roth from age 35-67, I'll be at $7.1 million. So maybe my FI number is a little larger than it needs to be since I plan on working after, but I'm kind of trying to plan for worst case scenario like become disabled to a point where I can't work. I want my FI number to be able to support me even if I don't have fun money coming in after age 35.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: the_fixer on January 16, 2018, 07:01:03 PM
Perfect example of how saving in your early years really makes a huge difference


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Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: MrThatsDifferent on January 17, 2018, 05:40:46 AM
$650k

Need $35k/yr in retirement

Downshift at 50.  Need $200k in retirement account, $250k in investments, $200k cash

Have 2 years sabbatical traveling the world, no work at all, use $70k cash
Spend 8 years at fixed locations drawing $16k a year and SO & I working for $19k a year doing fun stuff

Fully retire at 60 with $900k, providing $35k @4% drawdown for life
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: kork on January 17, 2018, 06:36:57 AM
Someone else posted about perception and how jobs seems to become more fun when you donít rely on them.

So true!

Iím 39 and have investments of 730k. Thereís a huge allure of just working to pay the bills from this point on while the nest egg grows.  Very much ďAmerican BeautyĒ working at the burger joint attitude.

I currently work for a company and need to be in the office 2 days of the week.  The other days I work remotely. Honestly, it feels like I work 2 days of the week.  Just yesterday there was some politics and some mud slinging and I thought to myself ďIím going to look for a job thatíll pay for my bills, but isnít full-time.Ē

Instead of feeling trapped in my job, I felt completely empowered to be able to make a choice for me and it wasnít financially driven. While ďBig cheeseĒ wife is going off, Iím thinking... ďI can just walk away and be no further behind than I was yesterdayĒ

The moment passed but if itís was 10 years ago, I would have been stressing over it.  For the most part, the job is enjoyable because I have most of the control over my own schedule.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Bird In Hand on January 17, 2018, 07:37:51 AM
I've known this concept for a while with a different name and a slightly broader meaning: early semi-retirement -- ESR.

The particular flavor of ESR being discussed in this thread seems to be more about quitting one's existing full-time job and finding something more fun to do to cover expenses while the portfolio grows.  In this case I propose something like:

F--- It! Semi Early Retirement! (FISER, rhymes with 'miser').  It makes a good noun for an occupation, as in "Look at that lazy FISER bagging groceries at TJ's while her stash does all the hard work!"

For the more risk averse among us, this approach threads the needle between RE and full-on OMY syndrome. 

In our case, my wife and I completed the heavy lifting of accumulation fairly early -- $1M by age 40.  We like our jobs, but we would also like to free up some time to do other things while we're still youngish.  If we stop saving now and just work to cover our expenses, our nest egg should grow to be bigger than we'll ever need in 10-15 years.  And if an historically long/severe downturn in the markets makes this otherwise, then we'd just keep working part-time in the jobs we (hopefully) would still have.  With any luck we'd still enjoy it too!
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: trollwithamustache on January 17, 2018, 08:21:46 AM
SWISS

Semi Working Individual with Savings/Stache

Well SWISS is a heck of a lot easier to say than "SRIWS", but we run the risk of people thinking we're from Switzerland....

does that mean we will all have to pass a test with a K31 rifle  and keep more chocolates on hand?
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Ocinfo on January 17, 2018, 08:52:09 AM
$800k in investments is our number (wife and I) for not needing to save money. We plan on hitting it in less than 3 years, around when I turn 35 and she is 33. At this point, I will transition into a remote work setup in a MCOL city ($800k actually makes us FI in this location), while we prepare for a couple year stint as expats (already spend 1-2+ months outside US for work and vacation).

We’ll likely keep saving money but at a reduced amount as we’re both pretty good at making money and, even part-time work in our fields would be more money than we need for the MCOL city. I’ll probably keep working part-time as a lot of my work is similar to research I’d do for fun anyhow so might as well get paid to do it. Wife can do contract work for $50 to $100 per hour, which quickly adds up.


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Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: SpareChange on January 17, 2018, 10:28:41 AM
This is what I'm planning to do. My workplace and career are very flexible on the number of shifts worked. There's an app we can use to add/trade shifts. Employer doesn't care who works as long as there's coverage, and it's not overtime. I think I'll continue FT until my net worth hits at least 300k, and then drop down to a scheduled 16hrs/wk...the minimum needed for health insurance and other bennies. I should be earning 6 wks paid time off a year by then, with 50-60 days sitting in my pto bank. I can easily live on that with room to spare without touching the stash. I can then add shifts occaissionally if/when needed for fun stuff. I'll still contribute enough to the 403b to get the match.

No particular desire (yet) to leave career or employer, so I don't perceive working another 10-15 years as a problem. Both are very stable. Don't think I'll be able to do the slow travel thing so much with aging parents.

It would take a minimum 5 more years FT to get FIREd, and I don't think that would be the optimal way to go. Tired of working FT, and I'm not getting any younger. :).
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Pennycounter on January 17, 2018, 10:42:54 AM
We are at the point now where we could keep letting our savings compound and not save any more. we would be at our full fi number in 12 years with this approach. The issue is that our spending is so high, we would not be able to work low-wage jobs in the interim. We love in A HCOL. We would still need to earn a salary of at least $100,000, to account for our spending plus taxes on that income. At that point I may as well just keep my job at a higher salary and work 2 full fi through savings.

It's something that I look at but it doesn't really work in our situation.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Chairman on February 25, 2018, 10:31:55 AM
The level of optimism in this thread is amazing.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: 2Birds1Stone on February 25, 2018, 11:06:45 AM
The level of optimism in this thread is amazing.

Realism my friend =)
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: retireatbirth on February 25, 2018, 11:29:32 AM
I've been dwelling on this for a while. I'm mid-30s and at about $320k. I'm strongly considering semi-retiring in a few months. I would still seek a fun, highly paid job, but I think I'd be fine with the worst case of just settling for part time work. Anything is better than my current job.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: retireatbirth on February 25, 2018, 11:53:04 AM
The level of optimism in this thread is amazing.

Which part? The 4-7% expected returns or the ability to make about $30k in fun jobs?
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: rubybeth on February 25, 2018, 12:19:57 PM
The level of optimism in this thread is amazing.

Which part? The 4-7% expected returns or the ability to make about $30k in fun jobs?

A lot of people do jobs in "retirement" even without a huge amount of savings. They make ends meet with part-time jobs and social security, and live very simple lives. Having $500-$800k in savings that you don't need to touch for several years is a dream for many people. Having $1mil+ like many people plan on this site is out of reach for lower-income folks.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nereo on February 25, 2018, 12:52:15 PM
The level of optimism in this thread is amazing.

Which part? The 4-7% expected returns or the ability to make about $30k in fun jobs?

In most developed countries its pretty hard NOT to make $30k a year if you're working at least 32 hours/week (4 days). Whether its "fun" to you depends on what the job is and what you like doing.
Long term (2+ decades) 4% is among the worst the broader US market has ever returned.  Will the next several decades be worse than the worst we've experienced? ...maybe.  Seems pretty pessimistic though...
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: trollwithamustache on February 25, 2018, 01:54:50 PM
The level of optimism in this thread is amazing.

Which part? The 4-7% expected returns or the ability to make about $30k in fun jobs?

How is it optimism/unrealistic if you actually know what your spend was last year, the year before and how its tracking this year? Sure the rate of return may be off, but then I have to work this gig that I enjoy for another couple years. There are worse tortures out there.  Control the things you can control.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: tj on February 25, 2018, 02:08:10 PM
I've been dwelling on this for a while. I'm mid-30s and at about $320k. I'm strongly considering semi-retiring in a few months. I would still seek a fun, highly paid job, but I think I'd be fine with the worst case of just settling for part time work. Anything is better than my current job.

A fun highly paid job? What unicorn might that be?
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: 2Birds1Stone on February 25, 2018, 02:08:42 PM
The level of optimism in this thread is amazing.

Which part? The 4-7% expected returns or the ability to make about $30k in fun jobs?

In most developed countries its pretty hard NOT to make $30k a year if you're working at least 32 hours/week (4 days). Whether its "fun" to you depends on what the job is and what you like doing.
Long term (2+ decades) 4% is among the worst the broader US market has ever returned.  Will the next several decades be worse than the worst we've experienced? ...maybe.  Seems pretty pessimistic though...

Eh, assuming that PT work paid $15/hr you are grossing a hair under $25k
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: retireatbirth on February 25, 2018, 02:54:45 PM
I've been dwelling on this for a while. I'm mid-30s and at about $320k. I'm strongly considering semi-retiring in a few months. I would still seek a fun, highly paid job, but I think I'd be fine with the worst case of just settling for part time work. Anything is better than my current job.

A fun highly paid job? What unicorn might that be?

Fun as in intellectually stimulating. I'd target a data analytics job.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: nereo on February 25, 2018, 03:02:36 PM
The level of optimism in this thread is amazing.

Which part? The 4-7% expected returns or the ability to make about $30k in fun jobs?

In most developed countries its pretty hard NOT to make $30k a year if you're working at least 32 hours/week (4 days). Whether its "fun" to you depends on what the job is and what you like doing.
Long term (2+ decades) 4% is among the worst the broader US market has ever returned.  Will the next several decades be worse than the worst we've experienced? ...maybe.  Seems pretty pessimistic though...

Eh, assuming that PT work paid $15/hr you are grossing a hair under $25k

Yup.  If youíre working 32hr/week you need to earn $18.75/hr to grow $30k (assuming working 50/52 weeks).  At 40 hours itís $15/hr.  If you are a couple you can cut either the # of hours or the $/hr in half.

Depending on your background and skills earning $18/hr might be a dream or it might be a big pay-cut.  So whether its ďeasyĒ and ďfunĒ depends mostly on the individual.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: rockstache on February 26, 2018, 01:22:55 PM
This is an awesome thread. I don't know exactly what my number would be, but it sounds more and more like this could be a viable option for us, especially if my job allows me to work remotely. I don't need the health insurance, so it would really be just working for what we wanted to spend. It seems like it would be hard to transition to a mindset of not saving though.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: gutts on February 26, 2018, 03:55:03 PM
400K + a reliable and somewhat offroad capable vehicle to travel across South and North America/sleep in it/live on the public land.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: 2Birds1Stone on February 26, 2018, 07:16:37 PM
400K + a reliable and somewhat offroad capable vehicle to travel across South and North America/sleep in it/live on the public land.

Very close to my my own numbers/plan!

I will be closing in on that sometime late this year or early next year =)
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: formerlydivorcedmom on February 27, 2018, 09:34:23 AM
Current plan is to look into part-time work when I've reached about 2/3 of my stash goal.  I would likely do part-time or contract work in my current occupation, just because the money is so good.  I've also thought about transitioning to teaching, which would pay all the bills but would be a full-time job.

I'm struggling with this choice.  I make terrific money now, I'm just bored.  I don't know if part-time in this occupation would be enough to get around the boredom, or if I'd just end up ticked that I have to work an increased number of years part-time.  Plus the worry about how long part-time work might be sustainable.  Yet if I change careers completely, I might end up hating it at half my current salary....

We probably have 4-5 years until we get there, so I at least have time to think about it.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: kork on March 29, 2018, 06:18:30 AM
I think I have a good handle on this as I've been thinking about it for a while. Currently, my wife and I have about $700k in investments and $150k remaining on our mortgage.

Because of turmoil at my work, we've been looking at our numbers quite a bit.  Should we pay off the mortgage? How much is our barebones FI? Can we crush some of the groceries? Do we really need to do the hardwood floors?

And as such, it turns out to be some simple math. End result is...

We're there!!!

Currently, our monthly spending is about $5k. Not very mustachian, but that's in Canada with a family of 4. $2k/month of that is mortgage and kids RESP/College savings. This could stop at any time by paying off the mortgage and reducing our monthly expenses down to $3k/month. $2k a month is for Insurance, food, gas, heat, hydro, property taxes, etc. The remaining $1k of that is extra stuff.  For example, this month it was a new iPad and tickets to two music concerts. Next month it might be activities for the kids or a little vacation. 

So currently, our expenses living exactly as we are is $5k/month or $60000k / year between us. But that's today with a mortgage and kids. It drops by a lot without those expenses.

Now, what we really need to do is assume we're shutting off the kids RESP's and the mortgage is paid off. So then we use $3k/month as a our retirement number since we're living well and happily and not feeling deprived at all.  So assuming we have $700k now and we both have decades before traditional retirement age, it goes like this.

We need $900k to generate $36k a year with a 4% SWR. Assuming a 4% return on our investments we'll get there in about 7 years. Between now and then, we need to earn $5k a month to keep paying down the mortgage and keep up with the kids RESPS. My wife's take home is currently $2500/month.  That means that I would need to cover the other $2500. Well, if we drop our income in Canada, we'll get about $1k a month tax free in Child Benefits for the next 7 years (Until oldest turns 18). So then there's just $1500/month that we need to come up with. And because I work in technology, I don't think that earning $1500/month would be terribly difficult and on my own terms working on fun projects, that satisfies the OP's question of "fun jobs."

Currently though, we're adding about $60k a year to our stache through savings.  Keeping on doing what we're doing, we'll get there even faster. But it depends on circumstances, etc.

So our plan in that in 10 years when our youngest is, theoretically, in post secondary, the mortgage is paid off, we're no longer contributing to RESPs, we'll have $900k in investments. We'll draw down $3k/month at that point and technically be fully FIRE. Between now and 10 years from now we need to earn enough to live. As shown above, we could do it pretty easily. And that's not taking into account CPP, OAS, any inheritance or things that would only increase our net worth and income.

So to the OP's question of "how much would we need to be FI if we kept working for fun?" I'm going to say $700k which is where we are right now.  VERY GOOD FEELING!




Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: heybro on March 29, 2018, 08:05:44 AM
This is exactly what my plan has always been.

Once your house is paid off and you have no debt, most people take on more debt to acquire more stuff (bigger house, nicer cars, more vacations, etc.) but I would like to BUY more free time or BUY less stress or BUY more self-respect or BUY the ability to say 'No.'

Issues that always come up:
1. How do you buy health care if you were to work part-time?
2. How do you establish your 'enough' number.  Even if you figure out how much you need saved today that will grow to a reasonable number by the time you actually retire, there are so many 'what-if this happens' or 'what if that happens.'  I'd always like to believe that not all the what-ifs can happen at once so that perhaps you are as close as you can be (say 80%) and don't sweat about a (20% uncertainty).  What I mean is that you cannot plan for every catastrophe to happen so you basically become OK with a few catastrophes happening.

It just always seems that spending more money than you earn is looked at as OK.  But pulling the plug on traditional life is considered 'risky.'  I wish there was more devoted to working part time your entire life or finding living situations that allow for a non-traditional life (not having to buy massive property that you don't even care about anyway, etc.).
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: trollwithamustache on March 29, 2018, 08:52:04 AM
This is exactly what my plan has always been.

Once your house is paid off and you have no debt, most people take on more debt to acquire more stuff (bigger house, nicer cars, more vacations, etc.) but I would like to BUY more free time or BUY less stress or BUY more self-respect or BUY the ability to say 'No.'

Issues that always come up:
1. How do you buy health care if you were to work part-time?
2. How do you establish your 'enough' number.  Even if you figure out how much you need saved today that will grow to a reasonable number by the time you actually retire, there are so many 'what-if this happens' or 'what if that happens.'  I'd always like to believe that not all the what-ifs can happen at once so that perhaps you are as close as you can be (say 80%) and don't sweat about a (20% uncertainty).  What I mean is that you cannot plan for every catastrophe to happen so you basically become OK with a few catastrophes happening.

It just always seems that spending more money than you earn is looked at as OK.  But pulling the plug on traditional life is considered 'risky.'  I wish there was more devoted to working part time your entire life or finding living situations that allow for a non-traditional life (not having to buy massive property that you don't even care about anyway, etc.).

Once one can pull the rip cord, one is negotiating from a position of strength.  The Dear Lady Troll gets health insurance for her and the wee (well, not soo wee) ones even though she is part time. They really didn't want to loose her.

So yeah, is our number perfect? no. are there cost risks going forward, yes. Does it take some negotiating/haggeling/ time when you walked away to make it all happen, yes it does. But if you are currently spending less than 70% of you combined income, its pretty easy to downshift and still cover all of your lifestyle costs... and have no current withdrawal rate.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: kork on March 29, 2018, 11:50:23 AM
2. How do you establish your 'enough' number.  Even if you figure out how much you need saved today that will grow to a reasonable number by the time you actually retire, there are so many 'what-if this happens' or 'what if that happens.'  I'd always like to believe that not all the what-ifs can happen at once so that perhaps you are as close as you can be (say 80%) and don't sweat about a (20% uncertainty).  What I mean is that you cannot plan for every catastrophe to happen so you basically become OK with a few catastrophes happening.

I actually have a philosophy on this. Bear with me.

The first book I ever read was The Wealthy Barber.  I was about 22 years old and had 40+ years to retire.  I figured, based on his 12% gains that I'd have $10+ million dollars at 65 when I "retired."

I used to imaging all the things I'd do when I turned 65.  All those things I "thought" I would want. A big boat, a big house, a big this, that and the other thing. And on top of it, I was still early in my career and a keener.

Fast forward 15 years. Those things don't appeal to me any longer in the same way. Now I'm much more interested in the enlightenment of the Fulfillment Curve.

And here's what I've come up with to validate when is enough, enough.

I had a great upbringing.  It wasn't without drama, but I always knew I was protected.  I was secure. Always had shelter, always had food. But I needed to "save up" for things I wanted.  New video games, bicycle, toys, remote controlled cars... And through the actions of saving and sacrifice, my fulfillment was higher on those items that I actually had to work for.

So I figure, if I have enough money to satisfy the necessities of life and feel secure while still having the ability to work or sacrifice or save to obtain those extras, then that increases the fulfillment. Appreciation of the things we own isn't acquired with money... Appreciation can't be bought.

So the $1k/month we have that we spend on extra stuff right now, we'd need to save a couple months to refinish the floors or to buy a new macbook.  Do we need either of those, nope... But we appreciate them more when we don't have an endless faucet of money overflowing into our coffers.

So enough is enough to keep us safe and the larger the nest egg becomes, the safer it becomes during market downturns....   But I'm not sure we're interested in significantly more money flowing in.  It affects fulfillment in a negative way.

 
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Goldielocks on March 29, 2018, 10:57:49 PM
I think I have a good handle on this as I've been thinking about it for a while. Currently, my wife and I have about $700k in investments and $150k remaining on our mortgage.

Because of turmoil at my work, we've been looking at our numbers quite a bit.  Should we pay off the mortgage? How much is our barebones FI? Can we crush some of the groceries? Do we really need to do the hardwood floors?

And as such, it turns out to be some simple math. End result is...

We're there!!!

Currently, our monthly spending is about $5k. Not very mustachian, but that's in Canada with a family of 4. $2k/month of that is mortgage and kids RESP/College savings. This could stop at any time by paying off the mortgage and reducing our monthly expenses down to $3k/month. $2k a month is for Insurance, food, gas, heat, hydro, property taxes, etc. The remaining $1k of that is extra stuff.  For example, this month it was a new iPad and tickets to two music concerts. Next month it might be activities for the kids or a little vacation. 

So currently, our expenses living exactly as we are is $5k/month or $60000k / year between us. But that's today with a mortgage and kids. It drops by a lot without those expenses.

Now, what we really need to do is assume we're shutting off the kids RESP's and the mortgage is paid off. So then we use $3k/month as a our retirement number since we're living well and happily and not feeling deprived at all.  So assuming we have $700k now and we both have decades before traditional retirement age, it goes like this.

We need $900k to generate $36k a year with a 4% SWR. Assuming a 4% return on our investments we'll get there in about 7 years. Between now and then, we need to earn $5k a month to keep paying down the mortgage and keep up with the kids RESPS. My wife's take home is currently $2500/month.  That means that I would need to cover the other $2500. Well, if we drop our income in Canada, we'll get about $1k a month tax free in Child Benefits for the next 7 years (Until oldest turns 18). So then there's just $1500/month that we need to come up with. And because I work in technology, I don't think that earning $1500/month would be terribly difficult and on my own terms working on fun projects, that satisfies the OP's question of "fun jobs."

Currently though, we're adding about $60k a year to our stache through savings.  Keeping on doing what we're doing, we'll get there even faster. But it depends on circumstances, etc.

So our plan in that in 10 years when our youngest is, theoretically, in post secondary, the mortgage is paid off, we're no longer contributing to RESPs, we'll have $900k in investments. We'll draw down $3k/month at that point and technically be fully FIRE. Between now and 10 years from now we need to earn enough to live. As shown above, we could do it pretty easily. And that's not taking into account CPP, OAS, any inheritance or things that would only increase our net worth and income.

So to the OP's question of "how much would we need to be FI if we kept working for fun?" I'm going to say $700k which is where we are right now.  VERY GOOD FEELING!

That is a great desciption.  Pretty much where I am at, except I quit my job, down to part time $1500/mo and DH is working for $4k/mo. Since FIRE, a few items come up -- vacations, home maintenance, and a plan to replace the car.

The car is a big one for us.   it is 12 years old now and will eventually need replacement.  One way to cut some of our costs to give more wiggle room has been cutting insurance , I am dropping one car (going to ebike), and have dropped most of the life insurance, too.   Savings keep coming after FIRE.  (oh, and the kids are starting jobs this year and costing less and less)   
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: snapperdude on March 30, 2018, 01:13:52 AM

The first book I ever read was The Wealthy Barber.  I was about 22 years old ...


What kind of shitty ass schools did you go to?
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: 2Birds1Stone on March 30, 2018, 04:56:46 AM

What kind of shitty ass schools did you go to?

ded
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Lmoot on March 30, 2018, 05:43:44 AM
Already earning much lower than it seems the average is here, has its benefits. I would feel
comfortable leaving full time work if I had as low as $250k in the bank. Iíd continue working my part time job (which happens to be my ďfunĒ job, and has an employer funded 503b...though itís not a lot). And Iíd use most of the $250k to purchase rental properties so I can continue to generate income, while having assets that are expected to continue growing in value. Iíd keep maybe $50k cash, and build on that from after-expenses rental income profits. My expenses are lean enough that the fun job would cover that and my fun money.

I have dual citizenship to a country that has free healthcare, and while I donít plan on living there, I wouldnít hesitate to pay only for the most catastrophic plan I qualify for here, and getting expensive procedures done in my birth country. That is what my siblings have done. 3 years ago my sister had a life-saving procedure done with a 4 day private room hospital stay....cost less than $1,000 (all we paid for was the supplies, a bag of blood, and the first day of the hospital stay. In the US, it would be around $50k (and that would just include 1 day in recovery).
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: FreshPrincess on March 30, 2018, 06:10:18 AM
This is kind of what my plan is.  DH would be content working his full-time job because it's easy, pays moderately well and has good benefits.  I love my job - I truly do - but I think I've always felt like I wasn't supposed to be working for a living.  In every new job I've taken something didn't feel "right".  And then I found this forum and it all kind of clicked for me; this is what I was missing.  I didn't HAVE to work if I just made better financial choices.  THIS was my future.

Long story short.  I plan to get us to 750k with a paid off mortgage by 40.  And then DH can work if he wants - his salary more than covers our bills.  And I will quit my job and let the pot grow while I do something I love.  My current obsession is dance.  No reason I can't teach a dance fitness class in my area for a few years.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: kork on March 30, 2018, 07:04:02 AM

The first book I ever read was The Wealthy Barber.  I was about 22 years old ...


What kind of shitty ass schools did you go to?

Ha! Meant the first "Finance" book I ever read.  ;-)
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: Nudelkopf on March 31, 2018, 08:06:23 PM
I've always had $300k in my mind as my "Baby FI". That's the number I wanted to be at by around age 30 - or the age that I'd probably start having kids. Then I can have some decent time off with the kids. And since I'm a teacher, it's really flexibile and very easy to go part-time (not to mention the 12 weeks of paid leave per year to spend with the kids!). Working 2 or 3 days per week or 5 half-days would bring in plenty of income to keep pay the expenses, plus a little bit of savings each year.

I'm on track to reach that $300k by 30, if I stay in my LCOL area. And I half-imagine that I'll have a partner to help raise the child with, which will also help.
Title: Re: How much would you need to be FI if you kept working (for fun) and only lived off of that income
Post by: kork on April 01, 2018, 05:34:52 AM
The other thing I noticed with the recent market correction is that by choosing to earn enough $ to pay the current bills is that I'm not as concerned with market fluctuations. I enjoy working, just not all the time. By having enough of a stache and working it easily allows to ride out the bumps.