"the big goal"; self-sustained finances?

[rj.phila]

hi all, im wondering how many of you have this as a personal goal for yourselves, or if not, what IS your pipe dream goal, so to speak?

i've realized that being in a position where your returns on investment, or passive, income is enough to sustain ALL living expenses(RE taxes, RE insurance, food, utilities, etc) has been a "magic number" or personal goal of mine for as long as i can remember. (as an aside, i am-at least for the next few years-AT this point, and its actually causing a fair amount of psychological recalibrating on my part! hehe, good problems, though).

im curious how common this particular "carrot" is, or if there's another one for you. or maybe most of you spend more time focusing on other things? i'd like to hear your thoughts on your long-term goals.....

[disneysteve]

I think this is exactly the goal that we are all working towards. It is called retirement. None of us can retire until we have what you are calling self-sustaining finances, in other words, when we no longer need to work for income.

We often toss around the rule of thumb that you need 25 times your annual expenses saved (not counting other sources of income such as a pension or Social Security). That allows you to draw down 4% of your holdings per year which minimizes the chances of you outliving your money.

What will I do when I determine we are at that point? I'll hang up my stethoscope and walk away. Unfortunately, I'm many years away from that point.

[scfr]

My husband plans to try out for the Champions (senior golf) Tour in a few years.
Doesn't get much more "pie in the sky" than that, does it?
The odds of actually making the cut are extremely small (maybe less than 1%).
However, just to try out you need to spend thousands of dollars (there are 2 qualifying rounds that in 2010 were $2,500 each to enter, not to mention the costs to travel to the qualifying rounds, entry fees in the tournaments you need to play prior to applying, the costs of equipment, the costs of the seemingly endless practice play, etc.)
And if by some miracle he did make the cut and joined the tour, then the real costs would kick in ... Think about all the travel tournament players do with ZERO guaranteed income, not to mention the cost of a caddy.

Worst case scenario (financially speaking), he makes the cut, closes down his business, and then makes absolutely no money while having very high expenses.

In a nutshell (a bit oversimplified), what he & I are working toward is to have our entire retirement savings by the time my husband turns 50.

[Scanner]

You are describing the term "Financially Independent.", where work is only optional and for fulfilment or more money, not necessary for survival.

It has also been teh arbitrary cut-off between rich and middle class, where your investments totally support you. Middle class people need to work (upper middle, middle middle, and lower middle).

Of course, "supporting you" is so arbitrary if it's just you in a small efficiency apartment in Racoon Butt, AL. You don't need as many investments as if you are living in a condo in Manhattan and supporting a family of 6 and traveling abroad.

[littleroc02us]

retire with wealth, no worries and lots of freedom to do what I want.

[bjl584]

Others have pretty much nailed it. My goal too is "financial independence." That point in time when my savings and investments will totally support me and my lifestyle without having to have a traditional 9 to 5 job. Or a job at all for that matter.

But, I'm not sure if I will ever get to a point where I'm totally without work. As my investments grow, I keep kicking around ideas like investing in real estate, starting a small business, and being a more active trader in the markets. Even if I don't work in the traditional sense, I do see myself doing at least something other than vacationing and sleeping in during retirement.