Recently saw a post asking people what their magic number is. Wanted to share my experience with people, but I consider my situation to be extremely lucky, unique, and an outlier.
Almost 32 years old, retired for about 1.5 years. Went to a decent state school, majored in finance, so nothing fancy. I started working at 18 in sales, but I didn't start making serious dough until I was 24. I made about 280,000 that year and my income topped out at 750,000. One co-worker of mine who was much older made $2MM for context. On average, my annual comp was $400-500K.
What was I selling? Debt to private equity firms for LBOs. Basically got uncapped commission for my production. But not surprisingly,Co made my bank ungodly amounts of money. As you guys probably know, private equity has been on a tear for the past several years. I was simply at the right place at the right time. Don't get me wrong, I hustled my ass off. Haven't traveled much and still not married, but hopefully the ship hasn't sailed for me.
Began to get burned out working 14+ hours, six days a week. From what I hear from people I'm still in touch with, things are cooling down. Too many dollars chasing too few deals. Family offices adding pressure to deal flow. Some PE firms are bracing for a recession.
Retired with about $6MM, about 2/3 of it is liquid. I was able to take my commission in stock to reduce tax liability. And at the same time, the stock market has been crushing it. Lucky yet again.
I like to keep things simple, so my allocation is: $2MM high-yield CDs, MMAs, and US securities, $2MM in stocks (sold some of my bank stock for other stocks and index funds), and $2MM in real estate, including my condo ($400K). Yearly cash flow (interest, dividends, and rental income) is about $400,000 minus taxes. Big chunk of that gets reinvested. No debt, live in the Midwest, and don't have any fancy hobbies/interests, except my Aston Martin, which is a money pit. But gotta live at least a little.
Girlfriend knows I'm a high earner, but has no idea how much I'm worth. As far as she knows, the Aston is leased, the condo is rented, and I have shit ton of student/credit card debt. Maybe, (just maybe), I'll tell her on our 20th wedding anniversary, if it goes that far.
I spend most of my time monitoring investments, maintaining the real estate I own, and working out. Also taking a cooking class. And I'm signed up for a photography class at the local college next semester. School should be more interesting now without the strings attached. And I'm always networking-- if/when I get really bored, I can probably find an independent consulting position to keep me busy.
AMA or give me advice.