Sgt.Sausage wrote:
- quote -

A quick spreadsheet check verifies that the calculation you reference
was assuming an income of $25,000 throughout the 40 year period. If the
person can get along on a fixed income for 40 years, he certainly can
get along on his savings of 20 times his final income for retirement.
In reality, as his income increases, his fixed contribution rate of 10%
will cause him to contribute more, and his final accumulation will be
even larger.

Dave

"Sgt.Sausage" <someone[at]microsoft.com> writes:

- quote -

I woret a perl script, maybe 10 lines, to do the
calculations. Most folks would probably have used Excel.
I'll be happy to post what I used, if folks would like.

- quote -

I have been assuming 7% after inflation all along. The
code actually also includes the ability for him to
get raises, but I set the raise percentage to zero.

The US stock market total return from 1926-1999 was
approx 11%. Inflation over that time was between 3 and 4%.
7% after-inflation is a reasonable estimate - for the
very long term (and without considering such other risk
elements as volatility, either).


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<BreadWithSpam[at]fractious.net> wrote in message
news:yob8xt173ly.fsf[at]panix1.panix.com...
- quote -

Although I haven't checked your math, I don't doubt it's
correct, but there's an important factor you forgot. He's
got to earn 7% *after* accounting for inflation, or that
half a million bucks will by him a HappyMeal(tm) and
a gallon-and-a-half of gas 40 years from now. That half
a million will (almost) certainly be worth DiddlySquat(tm)
after 40 years of inflation.

- quote -

Yes. It certainly is possible.

Dave

Yes I've seen those flipping shows and wondered the same myself.

One lucky flip and you've made it for life. But for every one of those
guys, you have probably a dozen other guys who tried to flip a house
and lost the shirt off their back.

Finding very much undervalued, fixer-upper homes is hard in my opinion.

Watch the movie "House of Sand and Fog" and you might never look for
such a deal :-)


me[at]privacy.net wrote:
- quote -

In article <as6lt11cfb6pqmp5f2bjut1p84i0okbah5[at]4ax.com> , me[at]privacy.net
wrote:

- quote -

That line of thinking is exactly wrong. Property flipping
without money to back up your deals and swallow the occasional
dud is financial Russian roulette. One of the deals is going
to blow up and wipe you out if you do it long enough.

On the other hand, there are a lot of every day people
who are retiring with $1-million+ in their retirement
accounts. The secret is the time value of money.

- quote -

This leapfrog method is like playing musical chairs...
sooner or later, the music stops, and you don't have
a chair to land on. The only person who gets rich in
the flipping scheme is the guy running the infomercial.
If there was money in flipping (doing it legally, at
least), this dude would be out there making the money,
not on TV setting up competitors.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

BreadWithSpam[at]fractious.net wrote:

- quote -

What got me to thinking was an infomercial abt flipping
homes....and how this guy made almost a million doing
it.... and how he would have NEVER saved that amt of
money up.

Well.... got me to thinking. Is it REALLY possible to
amass one million dollars on saving some of your
paycheck? Or must one find a way to leapfrog around
the usual way and try something like flipping houses?

me[at]privacy.net writes:

- quote -

By saving at least 10% of one's income per year and
investing somewhat aggressively (or at least not
painfully conservatively - ie. a portfolio of treasury bonds won't
cut it).

In fact, by saving 10% per year and earning 7% annually
on what's already been saved, one ends up with *exactly*
half a million on a 25k salary. (okay, well, $499,087,
assuming that all the savings gets added at the end of the year
and savings compounding annually at 7%)

If you put away 15%/yr and earn 7% on it, you make your
half a million after about 34-1/2 years.

- quote -

Bottom line - you don't need a 6-figure salary. You
need to live on less than you earn and save the difference.

As the saying goes, pay yourself first. If possible, by
payroll deductions. You don't miss money you never had or saw.



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What I'm suggesting is this:

Say one needs a min of 1/2 million to live very modest
lifestyle.

How is someone who makes 25k a year and works 40 years
supposed to save anywhere near 1/2 million?

Bottom line..... is it impossible to "save" yourself to
retirement unless you make a 6 figure salary? No?

A low amount. (hope that helped )

Start by adding up what you spend a year. Then
expect that to grow by 3% about per year, and
as you get older some things you pay for now will
become much more expensive, like health insurance
etc.
It also depends on how you invest what you have.
One portfolio with $1mil could get $50k/year fairly
reliably forever, while another with the same amount
would run out in 20 years.
How long do you expect to live in retirement? If
you're 95, $50,000 might be enough...
Joe

First you want to compute your monthly expenses and try to
estimate how those might change in the future. Then there
are a lot of online retirement calculators to help you. Try
http://www.fincalc.com/ , clicking on "Consumer Calcs,"
first. Then try some of the tools in the lower section of
http://home.earthlink.net/~elle_navorski/id4.html .

<me[at]privacy.net> wrote
- quote -

need more information

will you be renting or paying or mortgage
healthcare costs? travel costs? food costs? utility costs?

Single and no dependents

Live in Midwest where cost of living is low

Don't own my own home

What do you think the minimum amt needed to retire on
will be?