My comment on kids was said with tongue in cheek as my kids bring me different kinds of riches. But they ain't cheap (how can little people eat so much... ketchup?!) and I haven't even got to college yet. But, to stick with my theme, there's more to life than just maximizing your retirement.
That said, I often wonder what the heck my friends without kids do with all their time and money (that I perceive them to have).
We are traveling (err...
were traveling; I just got my refund for Navy Notre Dame in Dublin), eating well, drinking very old scotch, sleeping late, planning on retiring early, reading books without interruption, and not cleaning Cheeto dust off our sofa cushions. (Okay, that last one is a lie. We are totally still doing that.)
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I'd encourage anyone who thinks that buying real estate is the best path to wealth to please do some research. Generally, most RE investors look at the 1% rule--your monthly rent should be 1% or more of the purchase price. (This accounts for vacancies, damages, maintenance, insurance, property taxes, etc.) So if that $500,000 home won't fetch $5,000/mo in rent, it's not a good investment property, and that's still basically true whether you live in it for a few years or not. There are very few markets in the US right now that even come CLOSE to that. In our current neighborhood, a $1.5 million house, which would need to bring in $15,000!!! in rent to get to 1%, would rent for maybe $4500, so less than 1/3 of that recommended amount. (Oh, add "Living in Old Town Alexandria" to the list of what people without kids spend their time and money on!)
Sure, the home could appreciate astronomically. It could also... not. And it's an extremely ill-liquid asset. You know what else could appreciate astronomically? The money you put into a boring mutual fund because your rent costs are far, far, far lower than your home ownership costs.
For investing, Bogleheads is a great place to start, though their forums seem to be largely people making half a million dollars a year and feeling proud of themselves for only buying a new Tesla every other year instead of annually. But the investing info is solid, and The Boglehead's Guide to Investing book is a great place to start for a noob. It's what I read when I was transitioning away from FC**** (I know, I know!) and felt investing was entirely overwhelming. As it turns out, it's super easy and when you make it complex, you almost always
reduce your returns over the long run.
Also, keep in mind the 4% rule when trying to sort out what your money needs to look like in order to have the future you are aiming for. While no one knows what the markets or the world will do going forward, this is generally considered a safe (as safe as one can be with the stock market) withdraw rate. (Cue jokes about safe withdraw... I'll wait.) That means that you can withdraw 4% of your investments nearly in perpetuity and
with annual inflation increases and have almost no chance of running out of money. That's 4% of the starting number, regardless of what the market does (other than the inflation increase). So if you want to be able to spend $80k/yr in retirement (and keep in mind you may well have a paid-off house by then or at some point so your money will go a lot further), you need $2m invested on the day you stop working for pay. (If you like to nerd-out on this stuff,
https://www.firecalc.com/ has a interesting simulator that allows you to really play with various inputs based on projected spending decreases like paying off a house, or income increases like a pension kicking in, etc., and then it and then it makes a projection on what your finances will look like when you die--the date for which is another input you can play with.)
This makes it fairly easy and far less intimidating to try to figure out how much one needs in order to retire. Many calculations are based on a % of salary, but that's asinine and nonsensical. If I make $100k/yr and spending every last penny of that, then no percent (other than 100%) is going to to work for me. And if I make $100k and live in a van by the river (by the way, how is Bates these days?) and spend $10k per year, then all those calculations make no sense for me, either. But they would say that in both cases, I need the same about to retire on. Clearly, these calculations should be based on spending, not earning, yet many lazy methods don't do that.
**** Confession time. I worked for FC for a brief time. They snagged Husband as a client right out of the boat school and I married into it. When we got married, we went for the annual review and because we'd just moved, I was looking for a job and got hired by our agent as an admin assistant based on that meeting. My basic observation was that there were actually a lot of great people working as agents, but not for very long. The great human beings weren't very successful because they weren't willing to whore themselves, make people uncomfortable enough that they would fork over their contacts just to make the pressure stop, shamelessly promote themselves, and skirt right up to the edge of misrepresenting themselves and FC's products and policies. Consequently, they didn't bring in enough business to survive. This was the case with the agent I worked for. Super nice guy, actually. I think he was an agent for about a year before leaving. Because not only do they pressure clients to bring in more clients, they pressure agents to bring in more agents. So there's a very hard sell for them as well and nice people get sucked into believing they can do it, when they probably can't if they generally want to stay nice. (I'm sure there are exceptions, blah, blah, disclaimer, blah.)
