Net worth for FIRE in Bay Area

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May 1, 2021 53 Comments

What net worth is sufficient to “retire” in Bay Area?
I’m thinking 5M + owning a home. What do you all think?
Using 4% rule this means a passive income of 200k forever (assuming this is valid)

By retire I don’t necessarily mean do nothing, but rather not have to work for money. Do something that pays zero or very little or just pursue hobbies perhaps.

TC: 400k (185 base, rest stocks, so highly variable)
Net worth: 1.4M
Age: 31
No properties, currently renting.

It may take me another 10years atleast to get to 5M assuming I’m able to keep this job and the market remains hot.

#personalfinance #investments #fire #fatfire

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TOP 53 Comments
  • Box
    dollahg

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    dollahg
    5M is enough if ur retiring at 55. Not for 35.
    May 1, 2021 11
  • Yahoo
    yOjl47

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    yOjl47
    You need to adjust for inflation. $5M today is not $5M 10 years from now.
    May 1, 2021 12
    • Yahoo
      yOjl47

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      yOjl47
      I guess my point is, throw the ball where the receive is running to, not where they were.
      May 1, 2021
    • Google
      Abcd5432

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      Abcd5432
      Also 4 rule did not take taxes into account. Obviously the threshold for very high capital gains tax that will start at $1m with Biden's tax will keep going lower over time to raise more revenue and will eventually hit most investors.
      May 2, 2021
  • Blind is last place to ask for FIRE advice. Guys here will say you need $20M minimum.

    $5M + owning your own home is more than enough. Biggest expenses tend to be housing and you'd have that taken care of.
    May 1, 2021 3
  • Google
    bailamos

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    bailamos
    Not again.
    There's a thread on this every week.
    Each time the first question that can and should be asked is - why the h*ll do you want to retire in the Bay Area?
    May 1, 2021 3
    • eBay
      Leroy

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      PRE
      Credit Suisse, Amazon
      Leroy
      Because not everyone is willing to spend time in wastelands aka middle America?
      May 1, 2021
    • Google
      bailamos

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      bailamos
      @eBay: didn't know every state other than California is middle America?
      There's a big coastline on either side and the south. Florida, Oregon, Washington, Hawaii, many retirement communities without the Bay Area price tag and more things to do
      May 1, 2021
  • Apple
    sxgS57

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    sxgS57
    Problem is, in 10 years you may have a partner and kids and now life costs $500,000 per year. I recently hit 5M NW and it does not go as far as you’d think. You have to hold some earnings back to keep up with inflation, and your home needs a new roof, and you’ve got 2 kids in private school, and so on.

    If you want to “not have to work”, you can start by lowering your cost of living to more easily retire when the time is right. But note it will never feel like the right time make the change, so if this is something you actually want to accomplish, you’ll need to push yourself.
    May 1, 2021 9
    • Uber
      fhen23

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      fhen23
      Let's be conservative and say you earn 450k and use the safe withdrawal rate of 4% (which takes into account inflation). Let's say you have 3M invested and 2M of your net worth is illiquid. Your total income conservatively is 570k.

      The median income in SF is 120k. That's lower than your salary alone. You're making more on your investments than that. Your money doesn't feel like much to you only because of your mentality.

      I'm not saying this is what you're doing, but I see people here change their lifestyle to seemingly try to spend as much money as possible and make it so their enormous wealth doesn't seem like enough. For example, 40k for private school that is not college sounds insane to me. That's much higher than average, even for the bay.
      May 3, 2021
    • Apple
      sxgS57

      Go to company page Apple

      sxgS57
      Yes! There’s a saying that projects fill the time allotted. Well life fills the budget allotted too.
      May 4, 2021