Would you quit your job if you had 200k savings in 2020?

Could you ensure a sustainable location independent lifestyle (3k usd net income per month) without risking losing your capital ? How would you do it?

Would you invest in multiple businesses? Would you buy yourself time to learn a trade or look for consulting work or build multiple clients in a niche?

As the year kicks off what are some of the most potent investments and business ideas especially ones that require midlevel investments but are bankable niches and not 50/50 gambles?
 

Road_Less_Taken

Woodpecker
NapoleonDynamighty said:
Could you ensure a sustainable location independent lifestyle (3k usd net income per month) without risking losing your capital ? How would you do it?

Would you invest in multiple businesses? Would you buy yourself time to learn a trade or look for consulting work or build multiple clients in a niche?

As the year kicks off what are some of the most potent investments and business ideas especially ones that require midlevel investments but are bankable niches and not 50/50 gambles?

I manage a bit over that investing wise and with my backtesting I would make over that a month using leverage, though of course returns are going to be variable and its best to have another source of income.
 
I’d probably buy a nice Tiny House and never work again. Could probably live off 200k (maybe 170k after the house was purchased) for the rest of my life if I didn’t have to worry about rent.
 

NoMoreTO

Ostrich
More and more local governments are allowing for small miniature houses to be placed in back yards as 2nd residences.

I think this will be a big opportunity for additional rental income, particularly for first movers. Similarly, I have a friend considering actually setting them up.
 

hervens

Sparrow
You see, something funny happens once you actually manage to save that 200k..
You realize it's really not that much money and you even end up feeling just as broke as before you had.

Now, if that doesn't happen to you but on the other hand you get all excited and pimpy because you have 200k sitting in your bank account, that's another problem because there's a good chance you're going to blow through it really fast by doing some dumb shit like 'investing' in single stocks or cryptos trying to make 50%+ return.

There's a book I'd like to recommend while you're saving that kind of money: "Secrets of the Millionaire Mind" by Harv Eker. It talks a lot about the psychology behind money, and why most professional sport players end up broke after the end of their careers.

Good luck and make it happen.
 

redbeard

Hummingbird
Gold Member
No. At the end of the day, $200k is not that much unless you plan to camp out in a shack in Thailand for the rest of your life.

Assuming annual stock market growth is 7% that's only a $14k return each year, or roughly $1200/month. I don't know where you live but I doubt $1200/month is enough to support yourself, a wife, and a kid. Even less possible if you want more than one child.
 
Also keep in mind that if you are taking out capital gains every year, then the base cash investment will not grow. This is a problem for 2 reasons:

1. In the extremely unlikely scenario that the market never crashes, you will not keep up with inflation.
2. The market will crash eventually, then what will you do since you do not have enough money to wait out the recession.
 

Laner

Hummingbird
Gold Member
Not a chance.

I had close to that amount at one time. I spent over half of it in the last four years building up a business that will hopefully get me 10x the original amount. An actual business, with assets and products. For guys into marketing and online business, the $200k could be a way to semi retire. But not for a guy in his mid 30's with a baby.

I did toss out the idea of living in some shithole for a couple years and seeing if the interest and odd jobs might coast us along. But the places I mentioned - Bulgaria, Laos, Indonesia, etc - none had any spark my wife would have enjoyed. Especially with a little kid.

At the end of the day, being young and with some drive, having a family, the west is still the best. Ask me when I am child free, and I might have a different answer. But even then, I will likely want to be around grandkids so will probably be wherever the roots are.

Now, $2m, that is the current goal. That is a different question entirely.
 

bacon

Ostrich
Gold Member
If you are talking about passive investing, I don't see how you could get more than 7% or so from yield in the current market environment. That would limit you to buying tobacco companies, some unloved reit sectors (like malls, hotels), energy pipelines (essentially a utility that is unloved at the moment) and some big oil majors. The leverage option via calls and puts is a decent strategy but you would need some experience with that and that would be active investing and is riskier. Buying rental property for long term tenants or short term (Airbnb) might work out but you are likely going to have a very concentrated portfolio and unless you have some type of alpha at finding properties at a good price you will probably be overpaying. Additionally, good luck getting a mortgage without an income source.

Also, if you are just getting started in investing in equities my advice is to read as much as possible for the next 6 months and start small. This allows you to understand your risk appetite better (how will you handle big drops) as well as build up confidence in what you are doing so you choose the right investments.
 
redbeard said:
No. At the end of the day, $200k is not that much unless you plan to camp out in a shack in Thailand for the rest of your life.

Assuming annual stock market growth is 7% that's only a $14k return each year, or roughly $1200/month. I don't know where you live but I doubt $1200/month is enough to support yourself, a wife, and a kid. Even less possible if you want more than one child.

When I lived in North Carolina, I had a beautiful place for $400/month. There's no way I was spending more than 1k per month, though to be fair I have no debt or wives or children.
 

scorpion

Ostrich
Gold Member
I would encourage you to set your sights a bit higher than 200k. That's not going to be enough to raise a family or retire on unless you have some seriously low-cost, off-grid living setup or are able to get lucky and bootstrap a profitable business with it. If 200k seems like an impossibly high number (or even a big number) it's a good sign you need to work on developing your marketable skills. Even if you're currently down and out and can't find two dimes to rub together, it's not too late to develop profitable skills. Either learn a trade, learn to be a good salesman, or learn to code. All of those fields have relatively low barriers to entry and allow quick progression with hard work and diligence. There's no reason a moderately intelligent and industrious guy can't be making good money within 2-3 years in one of those fields. Just pick the path that suits you best given your particular aptitude and personality.
 

Dr. Howard

Peacock
Gold Member
If you have 200k cash, buy a house outright and then start investing your now zero rent/mortage payments. Having a paid off house is a pretty good feeling of independence, even if its modest.

Make sure you buy it in a low property tax state though.
 

Douglas Quaid

Kingfisher
I would need around a million to seriously consider never working again in the US. $500k to work part time or move abroad. You shouldn't take out more than 4% of your retirement investments each year. A paid off house with low property taxes and utilities could make things a lot easier, however.

Even with a million, I'd still want to work part time. I'm only 29 and would get bored. Working around 20 hours a week would be a perfect balance to pursue hobbies and travel.

I like index funds, and Vanguard, Fidelity, Charles Schwab, etc. have good options.
 

Repo

Hummingbird
MichaelWitcoff said:
redbeard said:
No. At the end of the day, $200k is not that much unless you plan to camp out in a shack in Thailand for the rest of your life.

Assuming annual stock market growth is 7% that's only a $14k return each year, or roughly $1200/month. I don't know where you live but I doubt $1200/month is enough to support yourself, a wife, and a kid. Even less possible if you want more than one child.

When I lived in North Carolina, I had a beautiful place for $400/month. There's no way I was spending more than 1k per month, though to be fair I have no debt or wives or children.

You likely have a different perspective of what a beautiful place is than the vast majority of people. Ive been to NC plenty of times and any place I would ever want to live was nowhere near that range. Having 1k to spend is poverty level income. . . .essentially minimum wage.
 
I guess it depends what you value in life. Had a job I loved, a week off at a time, a floor to myself in a quiet house with a pool outside and a mountain range in the backdrop. Hard to beat for people like me.
 

Graft

Kingfisher
Gold Member
"Quit your job" is a different action than "retire forever."

If I had 200k right now half of it would be in cryptocurrency so I could really retire. If I had 100k all of it would be in cryptocurrency right now.

If I grind my way to 200k, month by month, I would take a few years to travel the globe. If I get a life changing event like starting a successful company or having a seven figure year at work, I'd want to have more cash out of that "event" than 200k.

I would never fully retire. If I won the Powerball, I'd feel like such a useless prick if I didn't use the money to become a man who accomplished something. I never understood how these people won $300 million plus and not do shit with it besides spend it and give it away.

I'd say at this point, 350-500k is much more of my range for a "mini-event." I'm only taking risks that would lead me to at least that dollar amount. I'd pull out 60k or so and live on it for a few years abroad.
 

kel

Ostrich
Graft said:
If I had 200k right now half of it would be in cryptocurrency so I could really retire. If I had 100k all of it would be in cryptocurrency right now.

I believe in crypto and use it myself (not just "invest" in it, I actually use it, which is important for it to ever really work), but I wouldn't put all my eggs in one basket like that. I mean, I buy bullets, long-shelf-life food, and property as well and consider them a good investment and useful commodity, but I don't put everything in any of them.

Which are use investing in? I keep most of my "storage" in BTC and ETH and use XMR for transactions as much as possible. I'm over altcoins for the most part.
 

kel

Ostrich
MichaelWitcoff said:
I guess it depends what you value in life. Had a job I loved, a week off at a time, a floor to myself in a quiet house with a pool outside and a mountain range in the backdrop. Hard to beat for people like me.

Sounds like something to stick with, why'd you leave?
 

Zenta

Woodpecker
Gold Member
TigOlBitties said:
I would need around a million to seriously consider never working again in the US. $500k to work part time or move abroad. You shouldn't take out more than 4% of your retirement investments each year. A paid off house with low property taxes and utilities could make things a lot easier, however.

Even with a million, I'd still want to work part time. I'm only 29 and would get bored. Working around 20 hours a week would be a perfect balance to pursue hobbies and travel.

I like index funds, and Vanguard, Fidelity, Charles Schwab, etc. have good options.

Imho this is the most realistic answer to "retiring early". A million is the goal number and sadly as the years go by that number should realistically go up as well. You could in theory pull 40k a year off a million in index funds and live a decent life. 200k would only pull you 8k and thats not very much money and thats assuming your 200k stays untouched or the market doesn't crash or something.

My goal is 500k-1m and working part time. Thats a high number to achieve but its also the most realistic to support yourself and family on. 200k would be better if you already owned a house with no debt but just to buy a house in my area youre looking at 130-200k for something decent(which is low compared to most places).
 
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