How much wealth is enough?

coolcup · 20 March 2014

qldfrog said:
based on my own searches:
for a couple:
$60k(2014) a year after tax, with no debt and own PPOR is enough to live a reasonably indulgent lifestyle (inc a holiday O/S a year).
Not a splashing budget but you will have a life.
if you want this to be done without touching your capital and not loose on inflation (return let's say of 3 % above inflation on average)->
these 3% would need to be able to give back $60k+$20k tax->$80k a year
80k at 3%-> investment of 2.6 millions (excluding PPOR)
so IMHO wealth is enough for me at $2.6 millions:
at that level, you do not have to work, you may work but you do not have to
and your wealth should return you an income however old you will ever get

So the answer is:
2.6 millons in 2014 AUD
maybe 2.5 if you do not expect to live forever

Hi QLDfrog - I don't mind the maths above at all, but was just wondering why the $20k in tax would be paid in retirement?

ROE · 20 March 2014

sptrawler said:
Sorry danny, but I agree with frog, you can't rely on stupid returns or on a government pension.
If you don't want to rely on luck or a hand out, you need 2.5mill, in todays terms.
So forget about quick get rich schemes, get a plan in place and grind it out.

It's not that hard, I tried to talk my m.i.l to buy 2000 CBA share in 1994 at $10 i.e $200,000.

Today she would be getting $120,000 dividend, she chose to leave it in CBA on term deposit. OMG

But she is still happy with her choice. the government pension is still there.

Just buy for the long term.IMO

I cant really blame her even with hind insight, you don't want to put money where you aren't comfortable
and for whatever reason you lose that money in the investment, you not only bitter and twisted because you aren't comfortable in the first place, you lose a good chunk of cash and that is a recipe for a very unhappy life.

qldfrog · 20 March 2014

coolcup said:
Hi QLDfrog - I don't mind the maths above at all, but was just wondering why the $20k in tax would be paid in retirement?

retirement is whatever definition the government of the time attach to the name , I am not yet 50 but do not want to wait 65 or by that time what 70 maybe to retire and get the advantages given to retirees if any left.
If I retire in 3 years (and no, not to join the grey nomads or do endless cruise but have a life free of going to "work" for activities I do not enjoy).
Then whatever income i get will be taxed at around 30% hopefully less if the amount as given is relatively low but as I have seen australia following the European way in the last 20 years I have spent here, I expect it to carry on doing the same mistakes in the years ahead and that means overregulation, deficits and ever increasing taxes with contemps for achievers..sound familiar already..isn't it sad...

so my figures are conservative and you can replace retire by
financially independent regardless of any personal work income.
hope it helps

coolcup · 20 March 2014

qldfrog said:
retirement is whatever definition the government of the time attach to the name , I am not yet 50 but do not want to wait 65 or by that time what 70 maybe to retire and get the advantages given to retirees if any left.
If I retire in 3 years (and no, not to join the grey nomads or do endless cruise but have a life free of going to "work" for activities I do not enjoy).
Then whatever income i get will be taxed at around 30% hopefully less if the amount as given is relatively low but as I have seen australia following the European way in the last 20 years I have spent here, I expect it to carry on doing the same mistakes in the years ahead and that means overregulation, deficits and ever increasing taxes with contemps for achievers..sound familiar already..isn't it sad...

so my figures are conservative and you can replace retire by
financially independent regardless of any personal work income.
hope it helps

Thanks mate. That is eminently sensible.

sptrawler · 20 March 2014

ROE said:
I cant really blame her even with hind insight, you don't want to put money where you aren't comfortable
and for whatever reason you lose that money in the investment, you not only bitter and twisted because you aren't comfortable in the first place, you lose a good chunk of cash and that is a recipe for a very unhappy life.

Agree completely.

Two thing you realise when you retire, you can't afford to back too many losers and you have to keep back some money in 100% secure.

burglar · 20 March 2014

sptrawler said:
Agree completely.

Two thing you realise when you retire, you can't afford to back too many losers and you have to keep back some money in 100% secure.

Put aside a lazy million?

sptrawler · 20 March 2014

burglar said:
Put aside a lazy million?

That would be nice.

So adding that to frogs scenario, $1m @ term deposit and $1.6m in blue chips.

O.k lock it in and get on with it.lol

TikoMike · 24 March 2014

Been reading this thread with interest and thought I would share this video:

http://www.youtube.com/watch?v=UDEAVsYqpns

Probably one of the better videos I have watched on the subjectivity of wealth. Although done by an American I would think the principles could apply here.

Wysiwyg · 24 March 2014

TikoMike said:
Probably one of the better videos I have watched on the subjectivity of wealth. Although done by an American I would think the principles could apply here.

Without doubt the worst video I have seen. A genaralised, self opinionated, agro, no idea numbskull chasing youtube face time.

TikoMike · 24 March 2014

Wysiwyg said:
Without doubt the worst video I have seen. A genaralised, self opinionated, agro, no idea numbskull chasing youtube face time.

Attack the character not the content. Good stuff . I wish there was a facepalm emote.

burglar · 24 March 2014

TikoMike said:
... I wish there was a facepalm emote.

Wysiwyg · 24 March 2014

TikoMike said:
Attack the character not the content.

Mate, Uncle Fester should have stuck to acting as he has no idea about wealth and happiness.

TikoMike · 24 March 2014

burglar said:
View attachment 57344

Thanks.

Wysiwyg said:
Mate, Uncle Fester should have stuck to acting as he has no idea about wealth and happiness.

Lincoln Poynton · 25 March 2014

I would like say that it doesn't matter how much wealth you have the thing is how you utilize it. I think if a anyone have sense of handling the money then there is nothing better then this.

Garpal Gumnut · 26 March 2014

I find that the anxiety about gaining and the fear of losing wealth are the two main drawbacks to wealth.

I've managed to conquer the latter, and couldn't give a monkey's if I lost it all, as long as I had my family, friends and house.

I still have the anxiety about gaining more wealth, but am working on it, the anxiety that is. I tried very hard a few years ago to increase my wealth but assets are going sideways atm, apart from the bubble of property, and it's difficult to make a quid easily anymore, apart from working at a day job. I haven't increased, just gone sideways.

As to how much, 42 is the answer.

gg

sptrawler · 29 March 2014

Garpal Gumnut said:
I find that the anxiety about gaining and the fear of losing wealth are the two main drawbacks to wealth.

I've managed to conquer the latter, and couldn't give a monkey's if I lost it all, as long as I had my family, friends and house.

I still have the anxiety about gaining more wealth, but am working on it, the anxiety that is. I tried very hard a few years ago to increase my wealth but assets are going sideways atm, apart from the bubble of property, and it's difficult to make a quid easily anymore, apart from working at a day job. I haven't increased, just gone sideways.

As to how much, 42 is the answer.

gg

You are spot on GG, the same as frog, he says $2.6million, is required. He's right.
You say, it is overcomming the anxiety of attaining it. Your right.

At the end of the day, if you can afford to sit back with family and friends, and enjoy a stress free red wine and cheese platter.
It doesn't get better than that.

How much wealth is enough?

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Wysiwyg

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