Do you retire when you have "enough" or keep working because you enjoy it?
Is there a net worth number that is "enough" for you to retire or do you keep on working because you enjoy your work? I'm curious to hear everyone's mentality when it comes to work and their "number" for retirement.
For me - I used to flip houses starting back in the 2008 recession and held some residential rental properties as well. Nothing fancy, no waterfalls to model or anything that would really require a college degree. Started selling off my residential portfolio and 1031'd everything into some value-add NJ retail properties that are doing pretty well. I could live comfortably forever off the rental income since my expenses aren't crazy high. Sure, there's plenty of people that make more than me - but there always will be someone else that makes more no matter how much I make.
So, what are you working towards and when would you retire? What's your "number" to retire?
Retire
Both?
I hope I’m not working full time in 15 years, let alone 35, but I also hope I’m never fully out. It’s way less about money and money about mental stimulation.
I went from a full steam ahead merchant build multi & mixed use shop where I’d run 3-4 deals at a time to going out with a partner to try to get one deal started in an area very slow to entitle deals. If I have more than 2 hours of work a day for the past three months it’s a miracle. The first month was awesome. Ever since it has been a bit of a nightmare.
Keep your brain active. People aren’t meant to sit around without purpose.
Give me enough passive income and I’ll work part time to keep that going. Forget the rat race that’s the life.
What's enough passive money to you - $1k per day?
My current passive income allows me to go anywhere without having to work
I agree that one needs mental stimulation, but what if you have a menial job sitting behind a desk crunching spreadsheets? I suspect that not everyone loves their job, and most would leave in a heartbeat if they hit their "number."
I would hope that no one in this forum has a menial spreadsheet job when they’re in their 40s and 50s.
The ones working menial jobs usually don’t hit their number soon enough. Gotta do something cool to get paid/make that much
How has it been going out on your own? Sounds like you have something u/c and working on entitlements?
It has been educational, which is exactly what I was hoping it would be. I already have some lessons learned that I’ll be carrying with me for the rest of my career, and the best part is, as the “junior partner” or the “sweat equity partner” or whatever you want to call it, I’m not learning completely on my dime.
In general though, it has been slow. We are selling one deal (that my partner developed prior to my full time involvement, so I’m only marginally involved), working another through entitlements in a heavily NIMBY / anti-development area (which is new, since I primarily developed in the Southeast prior to this and became personal friends with some city managers/city planners due to how easy they are to work with), and then have an international pursuit which is fascinating.
Effectively then, I have one active deal, and it’s not even entirely “mine” given the partnership, so as I said in the above comment that is just dramatically different from the workload I am used to. Going from 3-4 projects at once that were 99% mine to 1-2 projects that are 50% mine leaves a ton of extra time in the day.
I think the vast majority of people want to retire at some point, just look at everyone you know that is 60+. I love what I do, but I have to assume I will end up like most and want to retire.
For me, retirement will be slowing down and limiting risk. Limiting and burning off the current and future PGs I have on debt, and reducing the concentration of investments. Getting out of asset management is a goal of mine, but feels more like a dream than a reality (I invest in the hospitality space). We will see!
My number is c. $6m - the moment I have that much, I'm retiring
What city do you live in? Do you only have yourself to support or also a family?
I'm currently in London, but plan on retiring in Southeast Asia and being childfree - so it's only gonna be me and my future wife
When you’re 55-60 work is different. Sit on boards, shake hands & kiss babies.
And btw get paid a ton more than you are now.
As someone who works for my family's business and loves what I do, I won't ever fully retire until I physically have to. As the developer, most of the parties I deal with wait on me because I am paying them. This allows me to control my own schedule, deadlines, vacations, push meetings etc...Obviously my mentality is still to get things done and push deals forward, but it's liberating to know that I'm the one in control. I also control my own priorities and decide what's important. There's no one telling me what to do and breathing down my neck for deliverables or updates. Because of these factors, I don't view my "work" as work. I don't wake up at 8AM groaning "I have to go to work today," it's more so a "this is the shit that I need to do." There are some nights at 11PM where I will randomly go through my financial models or analyze different investments etc... No one is forcing me to do it. I could always wait until the next day, but I choose to do it right there and then because I'm interested in it and want to. As a developer, most of my work is pretty high level too. Architects, engineers, etc...do the actually nitty gritty work and I just tell them big picture what I want and make decisions.
As others have already mentioned, for me, it's not so much about the money, although that is a huge perk, but more about the thrill of achieving the money. When a good development opportunity emerges, it's exciting to create a vision for the project, calculate my potential profit, and then win the deal. Once I've won the deal, it's fun and interesting to work with my architect, zoning attorney, and potentially city officials (if entitlements are needed) to make my vision a reality. The parts of the job that I'm not fond of such as construction or property management, I can outsource. So in some ways I am kind of already "retired" because what I'm doing now, I plan on doing when im 65+ as well
What product type are ya'll in?
Multifamily and condos, but have been keeping an eye out on commercial/retail deals and will probably pull the trigger in the near future.
It is difficult to explain to people not in development how much of a game changer this paragraph is for you as a person. I think it would be genuinely difficult to give that control up and go back to a “normal” job.
It wouldn't be possible. I tried because I got an offer at a very large institutional developer and for a while that was my dream job when I was in my early 20's. I didn't even last a year and left.
Btw great advice overall. This sentence reminds me of one of my adages: if you want to get paid (well, on time), work for the Money (not for a Developer).
Working for a Developer means you are two or three rungs away from The Money. That’s a critical factor when money is tight or if you are still trying to find your place in The Jungle (being on your own). They’ve honed their skills in exercising people.
I’ve almost always found working for the money sources meant more steady and better pay. Furthermore, sometimes and usually, The Money doesn’t know what they want; need guidance; and is disconnected from the ground/reality. Your Money relationships are the most important.
I genuinely can't tell if you are an actual person or chatgpt, regardless, I generally agree with your statements; however, there are some major caveats with working for "The Money" namely, risk. The perk of working for someone else is that you are not on the hook when shit hits the fan. Also, I am very fortunate to have parents who are in real estate development (albeit mainly single and duplex developments), which allows me to expand on what they've started and use their capital to grow. The hardest part about this business is having the capital to do it. Real estate is expensive, cost of carry is expensive, construction is expensive. Unless you come from money, everyone has to start by working for someone.
Career advice from someone who works for their family business....
Things are great in your position?!?!?
Noooo waaaaaaay.
Lol.
1.) I didn't provide any career advice
2.) If I do provide advice, judge the advice based on its own merit, not my background.
3.) This is an online finance forum. I'm not going to change my career to impress a bunch of internet college students
4.) My family has been doing single family and two family development for the past 30 years with total sellout prices in the ~$2-3mm range. I joined the business ~3 years ago and my dad has been semi retired for 2 of those. Now we are doing up to 20 unit mixed use developments with sellouts in the $15-20mm range. The most recent deal that we just signed a P&S for my family is entirely hands off on. I sourced it off-market, negotiated the terms (its a somewhat complex deal), designed it (high level details/layouts for the architect to finalize), and am now working with the zoning attorney/city/neighborhood to entitle it. From preliminary conversation with the city and neighbors, I expect to entitle it for 7 units and double the by right FAR. Of the 7 units, 2 will sellout at ~$1100-$1200/SF and 5 of them at $1500-$1800/SF. Oh and here's the best part, I only need to put in ~$100k to play ($75k earnest money deposit, $7500 for the architectural schematic designs, ~$7500 zoning attorney, $1k proposed plot plan, $4k landscape architecture. The deal is contingent on entitlement so I don't pay a cent in carry cost nor down payment until it is entitled). In theory, I could do the whole thing myself and once entitled, I could sell it for $5mm-$6mm, partner with another local developer or LP that I know who finances these types of deals or raise capital from friends and family to construct it. But why would I take on investors and split the profits when I don't need to? To impress you? I have other entitlement deals that I am working on that only require ~$200k to play and don't have carrying costs because they are rented out. But anyways, enough about me. I've been open about my investments and projects. I'd love to hear more about some of yours.
My number is probably $100bn+, will think about retiring once I reach this number
No matter what the number is it makes no sense to retire, the get to see your kids more is kinda bs bc majority of the day they are at school or practice. It get's boring after a few months and you start to decline when you aren't working towards something meaningful daily. And hobbies or travel isn't an excuse there are many people who are not doing your hobbies the middle of the day on a Wednesday and travel is for a few weeks/month at a time.
It's a romanticized idea, but in reality you need to work (whether you start your own thing or have side investments) to stay busy including other things.
While I enjoy my job, I only plan to do this another 10-15 years. By mid to late 40s, I should have investments of c. €2M+ built up. My plan then is to find a 9-5 type role which is less demanding and more fulfilling. I think this will most likely be academia, I’d be happy doing 2-3 lectures a week in term time, spending my other time researching areas of interest (entitlement / planning policy and rent controls in different countries), and taking 6 weeks off each summer. The income for this won’t be great but it won’t be bad either, and I can supplement my income with my investments (3-4% draw p.a.).
$15m is my number. Don’t think will have kids. Would like to achieve this by 40-45 and then travel, chill out, hopefully spend time with my parents in their later years since I’ve been away from home for a while now.
Own two $5m houses - live in one of them and rent the other to fund my passive income. $3m in stocks, $1m in silly fixed interest things and the remaining $1m in cash / working capital.
I think ~$10-15k monthly expenditure (assuming no monthly mortgage since houses should be fully paid already) is sufficient for me to live the lifestyle I want at that age which is just to eat at nice spots, luxury travel 3-4x a year, simple travel at other times.
Most important thing is to get health insurance sorted for the older years. It’s cheaper when young and healthy and it’s really important if you plan on retiring early especially if public healthcare is not free in your country.
Realistically I think I could get to $10m but $15m is going to be a stretch so I guess it’s all pointless in the end.
Serious question: why is health insurance the most important? Theoretically if you have 15M, you could cover any emergency $200k surgery in the rare instance that you need it.
Maybe it’s more psychological than not but I don’t really know how to budget for health emergencies (by definition you won’t have a sense how much emergencies are going to cost) and when I retire, I want to have very strong visibility on what expenditure will be. The situation you have a health issue draining expenses is unfortunately also the situation where you’re less likely to be able to generate any income yourself if you need it.
The only reason I’d be comfortable with retiring is if I have visibility on my spending so maybe I’m willing to pay for that somewhat via insurance. Totally possible that NPV of insurance premiums I pay is > any emergencies I would need but I don’t really know and it’s kinda nice to get rid of that left tail risk that could crush you if you’re retired.
Last point is I need to make a decision on health insurance today - when my base case is that I’m probably not retiring young. Insurance is more expensive as you get older in general. The error bars on my net worth today is fairly large and there are a lot of unknowns so it makes sense given I don’t really know for sure if I’ll have that cash in future to liquidate should an emergency come up.
Just retire in another country. You'd be surprised the quality of healthcare you can get even in countries like Mexico or SEA if you're actually paying for the nicer care (which is still dirt cheap compared to the US).
Don't think I could ever fully retire, would lose my mind, but would absolutely step back from a salaried role and do my own thing once I have the means to do so and gradually taper back when I'm ready.
I think the current trend must have your own investment to bring huge profits to achieve such a life, because the current inflation is serious and business in every industry is difficult.
I will give 30 days notice the day my assets hit the number my financial plan says I need to cover current lifestyle costs. I wouldn't just become a beach bum or a couch potato; there's always some kind of part-time/seasonal/consulting work that could be done to stay busy... but I have no interest in working full time in any capacity the minute I don't have to.
I imagine myself going through waves of retirement. Couple years off til I get bored, then take another gig for a few years or do some consulting, Rinse and repeat.
There's some travel and international living destinations that I really want to experience for extended periods of time which I simply can't do if I'm working a real job.
I think a lot of guys in top positions that don’t retire are in it for the social life.
You can become quite boring to people if you don’t have information to share because you retired. My boss who very well could retire now with more money than most of us dream of making told me this in some many words.
When you’re out of the “game” suddenly all those people who seem like friends, that you’ve been interacting with for years quit returning calls. I think that’s scary for some who have their entire personality wrapped up in their job. It seems like this is most prevalent with brokers, never I have worked somewhere with some many dinosaurs roaming the cubes.
Now that said - I’d 100% not be working if I didn’t have to be. It just so happens that my hobbies don’t pay dick and I need my job to fund them and retire someday…there is no fucking way I’d be doing my job if I didn’t have to be…fuck that bs about needing to be stimulated. I’d find things to keep me busy, no question. I don’t need to be spreading gossip and listening to gossip to feel fulfilled.
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