(03) 9020 2905COMFORTABLE?! Who wants “comfortable”? Raise your hand if exceedingly average, mundane and boring appeals to you?
No-one? Right, let’s get real. Let’s substitute “comfortable” for … “obscenely wealthy”.
Gen Xers, aim for ridiculously lavish. This is where you spend and splurge the equivalent of Fiji’s gross domestic product annually. Sometimes maybe even in Fiji, but largely equally across the seven seas.
Golf at the world’s greatest courses, flown to in a chopper with your Golden Oldies mates, followed by dinners at restaurants that would cost most a second mortgage, bedding down in hotels frequented by the stupendously famous.
Okay, maybe call this a “stretch target”. But unless you aim somewhere north of mediocrity, the abyss of common-ness awaits.
If “time is money”, Gen X still has oodles of the essential ingredient needed to turn “comfortable” into “magnificent”. And that’s the sort of retirement I want. Don’t you?
How much moolah is that? Like Dr Evil’s ransom demand in Austin Powers, “one million dollars” won’t be enough. And unless you’re intending to fund an inter-galactic space program, his equally ridiculous “one hundred billion dollars!” might be more than you can round up in the next few decades.
Here’s one formula. What’s your dream retirement income? Whatever that figure is, multiply it by 20.
If you and your partner want, in today’s money, $200,000 a year, then you need $4 million in income-producing assets. Exclude your home, as it won’t generate income.
Your definition of “obscene” will be different. As will the age you want to retire. And inflation will ramp these figures up stupendously in years to come.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and principal adviser with Castellan Financial Consulting.