$8M Net Worth by 40
I am aiming towards achieving an $8M net worth by 40 (33 now), mostly by living substantially below my means and investing aggressively. If you're aware of FatFIRE, this is the life I lead. My wife is also a high earner and is of the same mindset.
Question - there's NO way I envision doing IB my whole life. What kind of life does a $8M life afford you guys, do you think? Can I do like consulting or something low-calorie?
All depends on your lifestyle (obviously). So where you want to live, amount of space you need (do you own your home outright?), children? Vacations? Etc.
We have a net worth around there, although some deferred, some locked up, etc. and I’ve done the math and could easily take a job in the $100-200k range that is lower stress and have plenty for my life. With that, we have our home paid for, no children (so that may change things), no debts, and so each of us earning $150k a year is ~$13k a month after taxes that is just for “living” without having to dip into any savings. Seems plenty fine for us (even if you factor in children), then retire later on and by then the savings will hopefully have grown some more. Of course if we want to stay in a high COL city and pay for private schools, and upgrade cars, and take ridiculous vacations it changes things, but still hard to justify needing much more.
How old are you and what is your current HHI?
We are early/mid 30’s (so similar age), and non deferred/cash income has some vol but about $2.5-3mm on an average year (we both work).
I'm not really sure of the point of these types of posts. You're in finance, correct? IB, correct? Right....so you should be perfectly capable of calculating yourself what $8 million can afford over the next 40 years. If not, I'm not sure how you've made it this far.....
I had the same thought... it's pretty easy. Take the $8mm, multiply by some safe withdrawal rate (which OP should be familiar with since he knows FIRE) of 3% - 4% and you end up with $240k - $320k. You could work literally any job (or no job at all) and be totally fine. My suggestion to OP would be to find a job he really enjoys, perhaps some sort of advisory role at a LMM firm with good people and just coast while his portfolio grows.
you don't need to work when you have that much money. do sports, play musical instruments, learn languages, travel the world, and bang chicks all day every day.
I'm planning to retire and do the above when I have $4-5M.
I keep hearing the sweet spot is $5m. Even with the most frugal draw, you can live comfortably well.
Achieving the $5m? A lot of luck and planning.
Besides that, keep that hustling!
Five million is a fucking nightmare, Greg
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If you have 8M in cash by 40 and want to downgrade your job to something low stress that seems totally doable to me.
I have had this dream for awhile, but “life” pressures make this an impossibility for me sadly. It seems sad that I let others drive the direction of my life, but it’s the truth.
I do kind of have a hope I can still do this. Both my father and my father-in-law are successful and have money. My dad will leave me probably just a few million. I feel like enough where I can really consider quitting the soul sucking industry. But the real wild card is my father in law. He is wealthy but is always cagey with him exactly how much he has. I know he has made a ton over his life, but he has spent a ton too. If he can at least match my dad, I can be in a good spot. But if he really can back up his talk and leave me with 7mm+, I can really get out and get my weekends back.
I don’t understand the part about feeling like a loser with friends and family , what does that have to do with anything ? Do you mean that makes you spend more to go out , host parties etc.. ?
What I mean is that in my family and friend circle, most could retire if they wanted to right now by moving to some random, low cost of living area and living frugally. But that would be considered a life not lived / bum life / loser.
And yes, doing things like hosting parties, eating great food, doing exotic trips is just something we all like doing. I’m not saying my life is so tough and the fact I get to do this stuff is bad, of course it’s awesome. But it takes hard work to pay for it. And not doing this stuff would be viewed favorably is all I’m saying.
Living the frugal lifestyle is something almost all of us in finance could do after ten years, but is that living? I don’t know what the answer is. But for me, with wife and family perspective on how to live life, I can’t reasonably explore the frugal way.
I know you aren’t asking for advice, but so many of your posts reek of insecurity. The comments around “losers” and how others view you (and you view others) has got to be exhausting. Just live life, there is so much to enjoy out there. Oh, and don’t look for family to bail you out, do it yourself.
I always appreciate genuine advice. To be honest, that’s the first time someone mentioned insecurity though. People close to me always mention arrogance, being caustic or being judgmental. I feel like I do need to work on my compassion, but don’t really feel insecure. I more struggle with feeling superior to people most of the time. Which I know is wrong, everyone (most everyone) should be equal.
And I am very grateful for how “privileged” my life has been. I do enjoy it. I also can admit I like how jealous people are when they see my wife, or educational background or work history. I know everyone says to live your best life / who cares what others think / do what makes you happy - but I like knowing others covet what I have. It’s kinda twisted, but I feel lots of people feel like me but it’s hard to admit. I enjoy the looks of envy, especially when friends and family tell me that so and so said something like about me.
As far as don’t look for family to bail me out, you sound like my wife lol. She hates when I mention planning my financial life around potential inheritance. But I can’t just ignore a data point like that. And I feel with two Ivy League degrees and a decade in I-banking, I haven’t rested on my laurels and am some spoiled trust fund kid. It’s not like I’m not working hard, you know?
Yeah I think you are confusing the two. You like people being jealous of you, you think people want what you have, that is actually a version of insecurity. If people don’t want what you have, aren’t jealous of it, etc., then what is it all for? You seek that validation from others. People say “arrogance” because you probably are arrogant, but you are that because you like to think you are better than others and others want what you have.
It also comes through in not wanting people to think you are a “loser”. I’m no psychologist (I work in finance…), but it is much easier to validate yourself by thinking you are better than everyone else and that’s why it is all worth it. But thinking you are better to validate insecurities is different than just being arrogant.
Anyway, I wouldn’t touch that life with a 10 ft pole (for many reasons). It sounds like you are trying to have a certain type of life without being sure if it even makes you happy.
Ok, end of psych session.
I’m not sure I agree, but appreciate you taking the time to comment. My undergrad is actually in psychology not finance. I just did banking ocr because when I realized what psychologists made I said eff that and just went for the job with the highest base.
I just like to keep it real since its a forum. Everyone likes when others are jealous of them and get the spotlight. I mean look at the rise of blogging, reality tv, etc. I just really like it. I like others knowing how well I’ve done and how much I have. I think that strays more to arrogance and self-superiority rather than insecurity. I never worry what strangers think or am scared of public speaking or suffer from anxiety. In fact, my wife says I purposely acidic things to get a rise out of people, whereas I feel an insecure person would either hide or put others down to feel better about themselves.
I don’t want to insult someone and make them feel small. I just want them to meet me and be jealous. Of course I don’t want my family and friends to think I am loser, who wouldn’t? Thats my point of people saying on the internet live your best life and do whatever you want, but in real life people don’t live that way.
I do think I am better than others. I’m above average in looks, well educated, wealthy, strong family and loyal friends. I know it’s wrong to think that way, and I’m working on it. But I know I still feel superior to most others. I can’t help it. I do my best to control it but my arrogance rears it’s head at times.
I’ll do some research on insecurity, but I feel like if that was my fault, as opposed to arrogance, I would suffer from other things like constant worry, self loathing, or at least have some type of social anxiety.
Another reason I couldn’t do the frugal way of life, is that it would be unfair to my wife who never signed up for that kind of life. Feel like I would be totally effing her over considering she works hard and is accustomed to a certain lifestyle. Wouldn’t want her to live a “down” life just cause of me.
I guess it’s a mix of arrogance and insecurity. The part of you thinking you are better is definitely arrogance, but wanting people to meet you and be “impressed” by you is insecurity. If they aren’t, will that hurt you? If no one is impressed, will that impact your life?
As an example (and maybe this is arrogance) I’m not impressed or would want anything to do with that life. I don’t know if that impacts you in any way.
I understand what you are saying (wanting people to like your life, etc) but that is a version of insecurity. Getting validation by others wanting what you have. It can be a big issue when you realize that others around you have it better (or more, etc).
As for the wife point, that’s a personal decision. You have to pick the person that fits with your lifestyle and values. I have different values and so my wife is different (and earns a ton) but I won’t argue what is better there, that is 100% a personal thing.
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