$200k net passive income

[Intrinsic_Value]

Saw the other thread on $100k passive income.


Thought to myself why think so low.
Aim higher, if you only reach 70% of your target you will be fine so long as your target is higher (and you want a reasonable EXPENDITURE lifestyle).

In a nutshell, you need to calculate what is average full time wages.
For myself I look at what does a policeman make, what does an ambulance driver make, what does a mid-level public service member make.

In todays wages it is around $60-$70k.

In order to have a reasonable comfortable (but not rich) lifestyle you need at least double the average full time wages.

WHY?

because over time the economy will adjust to average full time average wages. The cost of living will reflect Mr and Mrs Average.

You want to be free of basic living expenditure + that extra, then you must be on an income stream that is above full time average wages.

Sure some people will say, just live like Scrooge Mc Duck, but is that really a retirement goal (if you like living this way that's your choice, this is not a value judgement on individual people).

In 100yrs all of the members reading this forum will be six foot under, you can't come back, you can't press re-start.

This is it, this is your one chance at this thing called life.

If you really want that passive income, then make sure your goal is meaningful. That it will have some real difference to your life.

Otherwise its just a mirage.

 

[WillG]

Is your passive income goal $200k or higher? How did you come up with your figure? How long will it take you to reach it?

 

[thatbum]

I'm all for being optimistic and the power of a positive mindset - but isn't aiming too high encouraging someone to take risks they might otherwise not need to take?

 

[Deltaberry]

True.

No risk no reward though.

I wonder how many very successful people out there - big household names - have not done something incredibly risky, reckless etc to get ahead in life. They just tell you the good bits after they made it.

 

[Charlotte30]

$200 k net passice income

I'm all for being optimistic and the power of a positive mindset - but isn't aiming too high encouraging someone to take risks they might otherwise not need to take?

I disagree. You do not know your capabilities until you try. I dont think you can ever aim too high. Often you are more capable than you think. Strategy is important along with belief.

 

[oc1]

While it's not up their on my "goals to achieve", as long as you're not totally consumed by it then why not.

 

[The Fence]

What are you going to spend it all on...?

 

[cimbom]

I'd rather retire years earlier on an average income than waste all those extra years aiming for a bit more. Who knows what could happen in the meantime. I would just be excited to get by without "having to" work anymore. So many other things to fill up my days

 

[EN710]

Depends on each individual.

Some like to aim high and hit as high as possible. Some like a chunk-able goals - this is different based on beliefs on what's possible and the effort required.

Currently $100K per year is "possible" and "hard, but not too hard" for me.
$200K is "possible" and "I have no idea yet on how to get there, and looks too long to achieve".

Hopefully, one day, $200K, $300K, etc will be "a breeze, no issue".

@The Fence - it's easy go up on lifestyle, harder to go backwards

 

[Singo]

I'd rather retire years earlier on an average income than waste all those extra years aiming for a bit more. Who knows what could happen in the meantime.

This is what I wanted to say as well. Time is limited and we just don't know when it will end. Btw, I haven't figured out how 100k can be spent thus 200k will be a headache

 

[D.T.]

Well if avg income is 70k, why wouldn't couples aim for 140k minimum from their investments? Generally you want to upscale life after work rather than down scale, right?

 

[jackbak]

Hi Intrinsic, I definitely see where you are coming from but I disagree with parts of this...

Thought to myself why think so low.
Aim higher, if you only reach 70% of your target you will be fine so long as your target is higher (and you want a reasonable EXPENDITURE lifestyle).

This is fine for people who fall short of achieving their goals, personally I like to set goals that I can achieve but do my very best to exceed them. I don't see the point in setting your long term goals twice as high as what you want to achieve because you may be disappointed each time you review your situation.

In a nutshell, you need to calculate what is average full time wages.
For myself I look at what does a policeman make, what does an ambulance driver make, what does a mid-level public service member make.

In todays wages it is around $60-$70k.

In order to have a reasonable comfortable (but not rich) lifestyle you need at least double the average full time wages.

WHY?

because over time the economy will adjust to average full time average wages. The cost of living will reflect Mr and Mrs Average.

You want to be free of basic living expenditure + that extra, then you must be on an income stream that is above full time average wages.

Sure some people will say, just live like Scrooge Mc Duck, but is that really a retirement goal (if you like living this way that's your choice, this is not a value judgement on individual people).

Not necessarily, in retirement you can earn the average wage and live far more comfortably than someone working on the average wage because you're not spending 30-40% of your income paying off you mortgages or putting away 20% of your income for retirement. Once you're retired you no longer have to save and can freely spend the money you are earning. But of course it would be great to be earning much more than the average wage.

In 100yrs all of the members reading this forum will be six foot under, you can't come back, you can't press re-start.

This is it, this is your one chance at this thing called life.

Some would argue this is a great reason to retire early on an average income and not spend an extra 10-20 years working to try and retire on $200k.

 

[HomePage]

$50K, $100K, $200K, $1M? How much is enough?

It's really quite simple. The better you are able to identify over consumption and learn to live quite happily without it, the less you need to have "enough" and the sooner you can stop doing this:

 

[keithj]

In 100yrs all of the members reading this forum will be six foot under, you can't come back, you can't press re-start.

This is it, this is your one chance at this thing called life.

Some would argue this is a great reason to retire early on an average income and not spend an extra 10-20 years working to try and retire on $200k.

I agree with all your post. Especially with the above....

Points in favour of retiring earlier on an 'average' income rather than waiting til the 'perfect' income (which may never be attained)

• It should be possible to structure your retirement income to increase a more than inflation, and get a progressively higher income.
• Your body (& mind ?) is likely to start to deteriorate somewhere between the ages of 45 and 60 - no-one knows when it will happen to them. You want to be enjoying the freedom while you are best able to.
• Draw down a bit of LOE for the 1st couple of years if you feel the need to splurge.
• You'll find that your ongoing 'wants' aren't as expensive as you expected, and that an above average (but not excessive) income is likely to be sufficient.
• In some professions it's easy to go part time, or as a consultant - transition to a higher passive income in full retirement with the safety net of an 'average' passive income in place
• Living expenses are significantly less for retirees than for working folks. Holiday off peak, zero work related travel/clothes/etc, no mortgage.

 

[ok180]

Well if avg income is 70k, why wouldn't couples aim for 140k minimum from their investments? Generally you want to upscale life after work rather than down scale, right?

You need that when you have a mortgage, kids, work expenses like getting there and back.

Once those are out of the way 100k would be more than enough for us.

I like those images you posted Homepage.

 

[Deltaberry]

Depending on your age, $100k (net) is not that comfortable.

If you have 3 kids and need to send them to private school, that's already $60k. If you have a $1m house and a $500k mortgage, you'd pay at least $35k in repayments and interest.

Leaves you with $5k for food and electricity and transport.

 

[BayView]

What are you going to spend it all on...?

On a really good lifestyle, good restaurants, travel, nice clothes, golf, nice car and so on.

Anything left over could be used for helping others; donations and so on, and you would have the time to do it.

There is always a good use for excess money, so I'd rather be one of those folk than one who is pay check to pay check or worse.

I don't think having a disgraceful amount of money is being greedy at all - unless you don't put it to worthwhile use.

 

[jackbak]

Depending on your age, $100k (net) is not that comfortable.

If you have 3 kids and need to send them to private school, that's already $60k. If you have a $1m house and a $500k mortgage, you'd pay at least $35k in repayments and interest.

Leaves you with $5k for food and electricity and transport.

I think it's more to do with lifestyle than age. A single parent on a pension may think they've won the lotto if they started earning $100k a year while others used to earning much more would cry poor.

 

[cimbom]

If you have a $1m house and a $500k mortgage, you'd pay at least $35k in repayments and interest.

Isn't the idea that by this stage you would not have any housing costs (outside of repairs, bills, etc)?

 

[MTR]

No need to stop investing when you retire, continue increasing cash flow/equity position.