Quote:
Originally Posted by Dodger
DK, you have factored in inflation which is important to consider but you are turning figures to acheive a reason to not move abroad. It is far more likely that you will get caught out by unexpected or unconsidered expenses than by inflation at 3%. When you live by figures you can make them say what you want to acheive, living in reality, as you age your income requirement lowers, additional income or lump sums come into your life say from inheritances or from pension income, own and state provided.
Inheritances are different for each of us and obviously unknown whens but are real, pension is structured, you know dates and can received projected benefits, if you started to allow for this your 3% drops, what are we considering now as a try to stop me growth rate???
I am not having a go at you, I am hearing in your post the same I heard in my own head when I didn't move to Spain, the same when I didn't take the business opportunity in the States or move to Slovakia, convinced myself with all manner of numbers and possible scenarios, have you done the same for how much you must save to stay living in the states or Denmark??? if not in such detail ask yourself why???
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I am certainly not turning numbers to achieve a reason not to move abroad, quite to the contrary. I am working very hard on my plans to become financially independent (I like that term better than retirement as I am too young for retirement). I mentioned that if I were to settle in Thailand that I could probably manage to do so with 1/3 the nest egg that I would need in USA. Further discussions in this thread probably lowered that requirement by a fair amount. For the sake of argument let's say I would need 25%. I have never done a calculation as to how much I would need to live in Denmark (with my life style it would be more than the USA). If staying in USA I figure that I would need $3M to be financially independent and to maintain my current lifestyle to days end and not deplete the nest egg.
In terms of inflation, I have not factored anything. No one could ever make any such prediction. The 3% is the return on investment that you could realistically realize above the current inflation. If the rate of inflation is 2% I assume that you can get a return of 5%; at 6% you could get 9%. While that is never a guarantee, it is statistically very achievable.
If it is far more likely that you will get caught by unexpected or unconsidered expenses then you should make some provisions for that too. My whole argument was based on the fact that someone would have X amount of money in the bank and the draw form that and the proceeds wpuld provide an income for the remainder of ones life, in which case you better account for the unexpected. On the other hand my calculations are based on not depleting the you nest egg, which for most would be an overkill too. Depleting the nest egg in the early years can have a profound effect on the plan, whereas in the later years may have little meaning. When are the later years by the way?
You mentioned that income requirement lowers at my age. I THINK NOT, or at least I should say that the requirements for disposable income is not going down. When I stop or slow down on work I will start spending more, at least for some years. As for inheritances, I am on the top of the family tree and unless there is a rich uncle that I don't know about there will be no more to be had in that department. Personally I am expecting Social Security payments from the US government in about 20 years, but I am honestly not counting on much (just to be safe).
I am sorry that you did not jump on any of the many opportunities that you had, especially if you now think they could matured to something special. I moved to the US at the age of 23, with $2000 in my pocket and hardly spoke English.