Quote:
Originally Posted by HockeyIlliterate
We must travel in different circles. I can't imagine not having $1.5 million saved up by age 50, and I'd be shocked if most of my friends didn't think likewise. And that's all I'm going to say about that because I don't want to say too much.
But on the spending matter---I track what I spend every month (and have for years), and $40k a year with no rent/mortgage payment would sustain, in my view, a very nice lifestyle. It won't allow for first class flights every week to Paris, but it will allow for plenty of travel and you won't go hungry. Besides, there is only so much stuff that you really need (or, honestly, want) to buy after a while.
As for the tax matter, in the US, if the $40k is from dividends/capital gains, there won't be any federal tax to deal with. As far as the federal tax code is concerned, earned income is for chumps.
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Most people, even professionals, do not track their expenses every month or look at their financial house the same way you'd organize a business' activities into income statement, balance sheet and statement of cash flows. This is habit #1 for sustained good financial health and if you can't do that you certainly can't make a budget, save, insure, or manage an investment portfolio properly such that you amass a position of after tax cash of 1.5 million 25 years after beginning a career.
Begs another question, who on earth would manage their cash so inefficiently?