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Everyone talking about making money. but nobody talks about their endgame

By komputodo following x   2014 Jun 24, 1:27pm 13,222 views   30 comments   watch   sfw   quote     share    


Everyone is constantly talking about making money but nobody talks about their endgame. What's the deal. Why do you need 7 houses..Are you planning on staying in the Ca Bay area. Do you need the money for the $100 tickets to the Warriors games? Or the $80 green fees at Harding park? $1000 for a trip to Disneyland? Is it for your kids $100,000 college degrees?

1   New Renter   ignore (11)   2014 Jun 24, 1:35pm   ↑ like (5)   ↓ dislike (0)   quote        

The endgame is the same for all:

3   E-man   ignore (0)   2014 Jun 25, 2:05am   ↑ like (0)   ↓ dislike (0)   quote        

Because it gives you FREEDOM........

4   TwoScoopsOfWompWomp   ignore (2)   2014 Jun 25, 2:52am   ↑ like (0)   ↓ dislike (0)   quote        

Here's one: Who are the boomers going to sell their stock to when it's retirement time?

5   E-man   ignore (0)   2014 Jun 25, 2:55am   ↑ like (0)   ↓ dislike (0)   quote        

thunderlips11 says

Here's one: Who are the boomers going to sell their stock to when it's retirement time?

Well, if they have stocks to sell. Otherwise, they will be working at Walmart until they kick the can.

6   edvard2   ignore (1)   2014 Jun 25, 2:57am   ↑ like (1)   ↓ dislike (2)   quote        

The " End game" is that most people want to be able to retire sooner and be able to do so without resort to eating cat food.

The general saying out there is that if you were in the most ideal situation planning to retire at the age of 60, well its not unreasonable to assume you could live to be 100 years old. So that's 40 years. How much would you need in order to live off of for that long? Well assuming you had a million bucks saves you would then have an income of $40,000 a year. In other words, not much. If you live in a super-expensive metro like the Bay Area, then you'd probably need double that if not more.

As for me... not sure. I'm only in my mid 30's. If I really wanted to I could sell my house, take the value it has gained, take our combined cash savings, relocate to pretty much anywhere else in the US minus the coasts, buy a house on some land for cash with cash leftover, get some ordinary job and work just enough to qualify for healthcare benefits and basically semi-retire.

But as stated- I'm pretty young and for the time being things are pretty good so why rock the boat just yet?

BTW, not everyone goes out and buys tons of houses, spends money on frivolous crap or otherwise put themselves into such situations.

7   edvard2   ignore (1)   2014 Jun 25, 3:00am   ↑ like (0)   ↓ dislike (1)   quote        

komputodo says

Went to latin America. It was an eye opener.

Bought a house for cash, prop taxes are $40 a year, been married for 25 years to a women that's not afraid of a little hard work. Have more friends than I ever had in the bay area. No stress, no pills, weight down, learned to enjoy simple pleasures.

That's just my version of the "endgame".

YMMV

I can say the same thing too. Except I actually live in the Bay Area. Guess we're both winners then...

8   Ceffer   ignore (1)   2014 Jun 25, 3:05am   ↑ like (2)   ↓ dislike (0)   quote        

In the SFBA, people want everybody at their funeral to think they were the biggest ASSHOLE with the most stuff.

9   drew_eckhardt   ignore (0)   2014 Jun 25, 3:06am   ↑ like (0)   ↓ dislike (0)   quote        

komputodo says

Everyone is constantly talking about making money but nobody talks about their endgame. What's the deal.

I need $5M in non-housing assets so that I can stop working, keep my modest middle-class lifestyle, and help my children live middle-class lives until I die whether that's at 90-92 like my grandparents or somewhat longer.

Including Social Security would knock $1.2M off that number, although I expect that to become means tested and am not counting on it.

There's also the risk of forced early retirement due to disability or age discrimination which suggests trying for more and being happy with a consolation prize of $5M not $7M or whatever.

Are you planning on staying in the Ca Bay area

I'm trying hard to make my millions before age fifty; if I pull that off I'll definitely stick around because there's no better place to start software companies.

If it takes longer I'll still stick around since it'll be easier to dabble professionally the way my 69 year old father consults on interesting chemical engineering projects a few hundred hours a year.

Besides after my last move it took four years to find an honest mechanic and decent hair stylist. After six years I still don't have an excellent sushi chef (oh how I miss Saito san with his tasty treats flown in from the Tsukiji fish market). Moving is too much hassle when you don't need to.

Do you need the money for the $100 tickets to the Warriors games? Or the $80 green fees at Harding park? $1000 for a trip to Disneyland? Is it for your kids $100,000 college degrees?

I worry more about health care. As of 2010 the average private room in a nursing home ran $7000 per month.

10   dublin hillz   ignore (0)   2014 Jun 25, 3:48am   ↑ like (0)   ↓ dislike (1)   quote        

komputodo says

That's the main reason for moving away

What's the portfolio number that's required to generate income that will cover expenses in south america without having to work? Regarding citizenship, I would imagine that they would require a foreigner to purchase a residence at a certain minimum amount to qualify, I doubt that they will just let a "gringo" immigrate otherwise, no?

11   Heraclitusstudent   ignore (1)   2014 Jun 25, 3:59am   ↑ like (1)   ↓ dislike (1)   quote        

thunderlips11 says

Here's one: Who are the boomers going to sell their stock to when it's retirement time?

They will sell to their kids, living in the basement, and then swap rooms with them.

12   Dan8267   ignore (3)   2014 Jun 25, 4:01am   ↑ like (0)   ↓ dislike (0)   quote        

komputodo says

Everyone talking about making money. but nobody talks about their endgame

13   edvard2   ignore (1)   2014 Jun 25, 4:03am   ↑ like (0)   ↓ dislike (1)   quote        

komputodo says

In latin america, you could just stay at home with a young pretty nurse giving you sponge baths for $700 a month.

sad.

14   SFace   ignore (0)   2014 Jun 25, 4:11am   ↑ like (0)   ↓ dislike (0)   quote        

"Everyone is constantly talking about making money but nobody talks about their endgame. What's the deal"

In the end, we are all dead. Meanwhile, If I remain healthy there are 50 years ahead of me and "money" means a whole lot before the end

And I was just me, I wouldn't matter as I can live on nearly nothing but friendship. I have kids, spouse, etc so Money is triple the importance. Nothing wrong with leaving behind some money for the kids and let them enjoy their golden years.

15   John Bailo   ignore (2)   2014 Jun 25, 4:14am   ↑ like (0)   ↓ dislike (0)   quote        

komputodo says

but nobody talks about their endgame

If I weren't ambitious I could have easily retired at 30.

But I had these things called goals and "believed in myself" and instead went broke!

Now I live cheap and hope that Socialists and crooks won't rob my meager 401k.

16   SFace   ignore (0)   2014 Jun 25, 4:33am   ↑ like (0)   ↓ dislike (0)   quote        

There are a couple of features that makes "forever" ownership very viable.

Prop 13. This is a 1977 thing and over the last 30 years, the prop 13 basis and market value basis is widening, espcially in prime areas.

Prop 13 is the most important permanent cost and if your property tax base is low and in some instance signifcant, it keeps the property (prime) off the market forever.

you make it worst by transfer which extends prop 13 to multiple generations.

Income tax basis. So besides having virtually 0 property tax, you would be shitting on yourself for selling a property and pay income tax when it is as easy to avoid as newspaper salesman on the phone. Step up basis allows you to step up a property tax with nearly 0 basis to 1M-5M or so, wiping out millions in tax no matter how much your home appreciated. This is subject to estate tax which has an enormous exemption per person. You make it even more viable when the interest against the equity is historic low so the equity is easy to access and cheap and there are options. If you can avoid a million bucks or even as low as 250K in income tax permanaently, 95% of the people would.

So not only can you do it once, you can do it twice if the death are staggered.

Combined step-up basis with prop 13 and you have about 200 SFH (non-flip) for sale in a city of 850K. and if that is not proof that homes are off the market forever, I don't know what is.

17   Dan8267   ignore (3)   2014 Jun 25, 5:28am   ↑ like (1)   ↓ dislike (1)   quote        

Anyone else notice the connection between this thread and American teens dont want to work?

Maybe American teens have gotten it, and the old timers still haven't.

18   edvard2   ignore (1)   2014 Jun 25, 5:31am   ↑ like (0)   ↓ dislike (1)   quote        

komputodo says

Sad? For whom?

That's really all I had to say in that regard.

Anyway... my experience in Central America ( at least in Costa Rica ) was that it wasn't actually cheap: it was fairly expensive. Other than real estate, gas ( $7 US dollars a gallon when I was there), food, electrical power, internet and so on were incredibly expensive. Taxes were also very high. Granted in return you get free healthcare and a host of other social programs that people in the US will probably never get due to the ridiculous partisanship that exists here. I remember before I went everyone told me it was the best place they had been to. I suppose everyone has their opinions. I thought it was sort of ok. Not sure I'd want to live there though.

Then again I think most people have some sort of plan along those lines. I am originally from the rural South and now live in the bay area. Most people from the US are totally scared of the rural south thanks in part to the movies and TV shows about it. I have no issue living there and it is damned cheap. As in I could buy probably 20 acres of land, a house, a barn, and a workshop for under 150k, pay hardly any property tax, and probably make as much noise as I want since the neighbors would be half a mile away. Sure. Its a highly idealized notion and it like any other plan would have drawbacks that can easily be overlooked. But in the meantime I'm fairly content. So here is where I'll stay.

OTOH... I'd sure as hell love to live in Hawaii. Talk about paradise, the times I've gone, which have been many, I nearly cry when I have to come back. That's saying a lot given that the Bay Area has pretty nice weather to start with.

19   bob2356   ignore (1)   2014 Jun 25, 7:52am   ↑ like (0)   ↓ dislike (1)   quote        

dublin hillz says

komputodo says

That's the main reason for moving away

What's the portfolio number that's required to generate income that will cover expenses in south america without having to work? Regarding citizenship, I would imagine that they would require a foreigner to purchase a residence at a certain minimum amount to qualify, I doubt that they will just let a "gringo" immigrate otherwise, no?

There are 14 countries in south america with 14 different economies, cost of living, governments, and immigration rules. There is no "they".

20   bob2356   ignore (1)   2014 Jun 25, 7:57am   ↑ like (0)   ↓ dislike (1)   quote        

edvard2 says

Anyway... my experience in Central America ( at least in Costa Rica ) was that it wasn't actually cheap: it was fairly expensive. Other than real estate, gas ( $7 US dollars a gallon when I was there), food, electrical power, internet and so on were incredibly expensive. Taxes were also very high.

Did you live in the same costa rica I did? I bought the majority my food locally grown and it was very cheap. How much electricity can you use? There's no heat or air. I don't remenber internet being that expensive, but I've lived a couple countries since then where internet was really expensive .

21   edvard2   ignore (1)   2014 Jun 25, 8:08am   ↑ like (0)   ↓ dislike (1)   quote        

bob2356 says

Did you live in the same costa rica I did?

I traveled with a group of local residents for 2 weeks, did all the stuff they did, went to the store, and so on. The thing that blew me away was how much it costs there considering the local economy. Nobody in my group had AC or heat ( duh its hot all year) but even so, their electric bills ran something like $50 US dollars a month. Gas as I mentioned was $7 US dollars per gallon. The cost of beer, wine, and groceries was either the same price or slightly higher than what it costs in California. Internet was around $50 a month. Up until recently cell phones were as much as $600 as there were no plans like what we have here. The list goes on. All in a country with an average yearly income of under 19k a year. Apparently among other Latin American countries the income and living standards are pretty good. but the cost of living there is certainly not cheap.

What I did find refreshing was that the government there seemed to simply work. Free healthcare, free college ( getting into one of those wasn't super easy ) and a whole host of other services. People seemed to have a generally positive view of the government too. The don't have a military and haven't for decades: whenever an issue pops up, they simply go to the UN. Green technology was seen as a sort of patriotic thing too: it wasn't some hippy conspiracy thing like its seen here.

22   dublin hillz   ignore (0)   2014 Jun 25, 8:30am   ↑ like (0)   ↓ dislike (1)   quote        

I've been to DR, mexico, panama, costa rica and nicaragua. Spent about a week in mexico in a part far away from "tourists." I've enjoyed vacationing there, but not sure about the whole uprooting of lifestyle and moving/living as expat. The thing you realize when traveling is that some stuff that you do automatically here almost like on autopilot mode you just simply cannot do in other countries. I can see the adjustment period easily taking a year or so. Besides my plan is to be mortgage free in the 2018-2021 range and at that point my cost of living should drop dramatically, possibly lower than it would be in other countries as an expat. Plus I can keep working here if I choose to, there's no way I can make this amount of money in central/south america.

23   CovfefeButDeadly   ignore (4)   2014 Jun 25, 8:40am   ↑ like (0)   ↓ dislike (0)   quote        

Shrug I love Los Angeles.

Plan is to buy a home in 5 years on a 15 year mortgage in one of the nice middle class areas of LA that everyone thinks is ghetto, but really isn't. Affordable due to poor schools which won't be a concern in a few years. The inner circles that meet that criteria in LA are Gardena, Hermon, parts of Long beach, and a little further out, Monrovia.

Retire at 63. Wife will be 57 and might have to work part time still. I'll have 36 years on the job and an income that will match whatever my post tax job income is at the time plus a decent nest egg.

Backup is to move to Las Vegas. I love it there and due to cost of living differences, I have no doubt that soley my retirement income would be more than sufficient. Everything else about that is gravy.

Of course that's a couple decades off so well see if Health and life intervene.

I'll admit I do look funny at some coworkers in their 60's(and even 70's!!!) and wonder WTF they are thinking. Sure as hell if there was a reasonable way not to have to be in one place for 40 hours a week, I'd be doing that.





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