Unusual case - Please give your opinion!

[MarkZimm]

Hey guys
I found myself in a very unusual - yet great spot - in life and I would like your opinion. I tried searching everywhere, but I can never find advice on situations like mine.
I'm 22 and I have a internet business.
It's earning me around U$ 200k/month. However, it probably won't have a big lifespan, meaning it could completely shut down in 6-12 months.
So far I have saved 3.75M US$.
I was wondering what would be your opinion about "retiring" at my age.
I currently live in Brazil, but plan on moving to Europe in the next 2 years.
Do you think that's enough money to use for a lifetime?
How much do you think it would be safe for me to spend every month in order to never run out of $?
Thank you for your time!

[jpg7n16]

The answer to your question has a lot to do with your goals in life. What are your goals?

Say you retired today, what would you do tomorrow? Lay around a play X-box all day? Many people who 'retire' end up going back to work, cause work gives your life purpose. What would you do with your life?

Then the question is, how much do you need to do that?

In order to make a lump sum of money last forever, you could withdraw about 3-4% depending on your investment allocations. Assuming a 7% return on your investments, and 3% inflation - a 4% withdraw rate would allow you to literally never run out of money (and keep pace with inflation).

I'd suggest a low withdrawal rate to let the money keep growing beyond inflation. 3% would be about $112,500 a year. If you can afford to do what you want to do with less, then by all means, do that.

[b4freedom]

Spam!

[MarkZimm]

Originally Posted by b4freedom

Spam!

Why Spam?

[b4freedom]

Originally Posted by MarkZimm

Why Spam?

Because I don't believe that you have an internet company pulling in that type of money. If you did, you wouldn't be wasting your time with small forums asking what to do. You'd be speaking to your financial advisor. Your just fishing for suckers.

[MarkZimm]

Originally Posted by b4freedom

Because I don't believe that you have an internet company pulling in that type of money. If you did, you wouldn't be wasting your time with small forums asking what to do. You'd be speaking to your financial advisor. Your just fishing for suckers.

Well, I indeed have a financial advisor, but he doesn't talk much about lifestyle and what I'm asking here..
He basically just tells me where to invest.
And I don't think this is a small forum at all. and about the "fishing for suckers", I have no intention with that, since I don't plan to tell anybody here what my business is.
Anyway, if you could give your opinion on the subject, I would appreciate it

[b4freedom]

What does it mean to "retire" anyhow? For everyone it is different. Just do what you want to do. If I had $4million, I wouldn't retire. If I had $100million, I wouldn't retire either. I'd just do more fun things and a lot less work. Everyone needs something. Work, volunteering, improving yourself, whatever. Just do it. If you have the means to do it then you should do it. Personally, I'd travel a whole lot more and do more physical activities like rock climbing. I love rock climbing, I only get to do it about once a year. If money/job wasn't an issue, I'd do it every day. Same with Mountain biking, canoeing, white water rafting, etc. As is I site behind my desk killing time on reddit while trying to think of a way to make $4million so I can do those things.

[TutoMoneta]

May we ask you - what is your internet business is based on? What is category? How many visitors you have or how you generate profits?

[tripods68]

Give the guy break

3.2 million for 22 years old is a lot. Depending how you spend or blow your money away; partying, blowing on big gifts, etc, it can last less than a few years. But I would think you would want to continue working away anyway and keeping most of your money invested smartly.

Anyway, I would sox away towards "muni bonds" or open up Vanguard account, and simply try to live on interests and dividends. Don't touch your principal.

As far Europe, you haven't given us enough information what exactly your plans are, goals, or where you plan to live--temp/or permanently. We can help you but you need to provide us more info.

[gf1723]

I would easily take most of it and invest it in safe funds so that you could live off the interest alone when your older. I would probably also enjoy having so much money while being so young. Have fun with your friends, but be smart about it. Travel the world and see things most people would never see in a lifetime!

Life is all about who you meet and the experiences along the way. Having that much money allows you to go on some great trips around the world. Just don't waste it all on fancy cars and big houses. You could use a small fraction of that money to create some very fond memories by just getting out and traveling the world.

[khosta]

I wish I were in your situation! I would keep some sort of job just to keep you entertained and then I would travel in the down time!!!

[rennigade]

There's a lot of 22 year olds making millions. I heard of this one dude named something zuckeberger or something?? apparently he's worth billions and he's pretty young. hmmmm

[baris]

Come to US, by a strip mall with a grocery store in it, do its landscaping, grow tomatoes on its roof top.

[Frugal]

I would not retire at such a young age, no matter how much money I was making! Not a good idea!

[BudgetMath.com]

The answer to the OP is a simple math equation:

Add up ALL of your monthly living expenses that you plan to spend after you retire.

Then multiply this number by 12. This is your total yearly spending… i.e. how much money each year you will need to survive.

Multiply that number by however many years you think you will live from after you retire to when you die. Just take a guess. So if you retire at say, 35 and you think you will live to 85. Then multiply your yearly spending by 50 years.

This number is the absolute MINUMUM you will need to survive without working.

Of course if you have that much money, you should definitely put it in an interest bearing account!

Does that answer your question?

[Mr Nice Guy]

Originally Posted by BudgetMath.com

The answer to the OP is a simple math equation:

Add up ALL of your monthly living expenses that you plan to spend after you retire.

Then multiply this number by 12. This is your total yearly spending… i.e. how much money each year you will need to survive.

Multiply that number by however many years you think you will live from after you retire to when you die. Just take a guess. So if you retire at say, 35 and you think you will live to 85. Then multiply your yearly spending by 50 years.

This number is the absolute MINUMUM you will need to survive without working.

Of course if you have that much money, you should definitely put it in an interest bearing account!

Does that answer your question?

No it doesn't because your equation did not account for inflation. Gas and groceries will not be the same price in fifty years from now.

Not only that, but it appears that the majority of people here believe US taxes will increase; maybe Europe's will as well. It would be wise to put a buffer in the equation for possible tax increase.

[thekid]

4M$ is alot of money but it also isn't.

Start thinking and acting like you are "rich" and it will be gone within a few years, guaranteed.

I think you are way too young to think about "retiring". If you are not moving forward, you will find that you are rapidly moving backwards.

Instead of thinking that you are set for life, think of it as a great opportunity. What you really have, if you are smart about it, is security and flexibility...two absolutely fantastic assets in life.

Don't think about stopping (you will end up blowing it before you are 30 for sure), think about how you can use the significant leaway you have to mold a life where (i) you can do something productive that you enjoy and (ii) enjoy a somewhat "nicer" lifestyle than you might otherwise.

Also, and I realize that you are still only 22, but I would encourage you to think in terms of your future kids (if you want any) with that kind of money. You have the opportunity to have something that can be built on, instead of sit on.

[BudgetMath.com]

Originally Posted by Mr Nice Guy

No it doesn't because your equation did not account for inflation. Gas and groceries will not be the same price in fifty years from now.

Not only that, but it appears that the majority of people here believe US taxes will increase; maybe Europe's will as well. It would be wise to put a buffer in the equation for possible tax increase.

Mr. Nice Guy: That's a good point. But that's why I said to put the funds in an interest bearing account. Inflation averages around 3% to 4% per year. If you put your money in an account that accrues at least 4% interest, then you will at least cancel out the inflation.

And about the tax increase, that's why I said this number would be the ABSOLUTE MINIMUM.

[happymonkey]

If I had that much socked away, and still had as much as you've got rolling in, I'd continue riding the horse and stuffing as much as I could in savings and other investments. You can make that type of money last a very long time if you're sensible about how you spend it. I think I'd live extremely modestly, because I value free time over having a bunch of "flash."

I don't think you're too young to retire, especially if you've got the skills to make money on your own. The one thing you don't want to do, and you have the luxury of avoiding this, is getting a 9 to 5, life sucking job.

Good luck!