In order to quit the rat race or retire for good, you need to look at your passive income rather than net worth. If your passive income is greater than your expenses, then you are financially independent as you no longer need to earn an active income. If your expenses are high, then you will need to earn a high passive income. For instance, if your expenses as retirees is $200k pa, then your passive income will need to be $300k pa. If your expenses is $40k pa, then $50k pa of passive income would be enough.
Many retirees in their 60s retire comfortably earning passive income from their investments. They don't lavish much neither are they stingy.
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Originally Posted by Unregistered
I see a lot of people here compare their earnings and net worth. While comparing can be useful in knowing where you are in life, it can sometimes be self defeating if it makes you miserable if you know that you are not performing as well as others. For instance, a 55 year old person with a net worth of $5m will feel unhappy if someone else who is 40 years old shares that his net worth is $10m. Even though the older guy is actually doing very well by any yardsticks, he still feels inadequate and continue to be a corporate slave. By the time he reached a net worth of $10m, he is 70 years old and then die at 75. He just enjoyed 5 years of retirement and leaving behind $9.8m of his wealth to his children you then spend all this wealth on gambling, drinking, smoking and womanizing.
So, the best is to set a target for yourself. Once you have achieved a certain amount of wealth, then retire and plan to spend 90% of your wealth till you die. Just leave 10% of what you have earned to your children so that they too will work towards their own retirement. You don't have to work so hard for your children's early retirement. That is foolish.
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