40 years age dream job life savings revealed or how much money you need to save to live without work after age 40? One of the most desired dreams by many people who have reached the age of 40 is to have the ability to live without work. That is, save enough to be able to retire and forget about the labor market.
Is this possible? It is highly complicated, but the reality is that, if you listen to the numbers, you can get it. The amounts you will need, however, are high.
But before getting into the matter it is essential that you keep in mind that to achieve an adequate volume of savings you need to follow the most basic principles of personal finance: cut expenses as much as possible, generate extraordinary income (liabilities), automate savings, do not spend more than you earn, use applications to control spending and a long etcetera.
Once you have all this clear, it will be easier to enter into a specific saving habit that can make you save to live without working from the age of 40. Of course, also taking into account your debts, so that you do not question all your financial freedom. Everything is important.
How can you then live without working? Saving and investing. Or you get the lottery, of course, which is even more unlikely.
40 years age dream job life savings revealed
Therefore, the best formula to live without working from the age of 40 is to take advantage of the returns generated by the investment. We need numbers. The amount of money you'll need for this will depend on your lifestyle: the more money you spend, the more money you'll need. It is not the same to live with 1,000 euros a month to do with 3,000 euros. All this varies depending on each profile.
That's why the concepts of frugality and financial independence often go hand in hand. People who want to quit their jobs and retire as young people tend to reduce their level of spending as little as possible. In this way, it will be much easier for them to accumulate the necessary capital to cover these expenses through an income.
Another of the fundamental factors is, indeed, the profitability obtained. The higher the return you make on the investments you make, the less money you need to achieve that financial freedom. The main drawback is that you can't get a check on this point. Of course, you will be at the mercy of the progress of the economy and the markets.
40 years age dream job life savings revealed
But, going to the concrete, how much money does it take to live without working from the age of 40? Considering that the market's historical return is 7%, the goal of living off the stock market may seem easier than it actually is.
The problem is that profitability does not subtract commissions, which can be between 1.5% and 2.5% of the profits, and inflation, which reduced between 1% and 2% more to the cost effectiveness, or taxes, which are eaten each year between 19% and 23% of the profitability depending on the amount you have won.
Imagine that you need 1,000 euros to live or, what is the same, 12,000 euros a year. In that case, focusing on investing the money in a product with an annual return of 6% and assuming some risk-something that some investment funds get in the long term-you should have saved 200,000 euros.
40 years age dream job life savings revealed
On the other hand, if your claims go much further, the savings would have to be much higher. If you want to have a monthly income of 3,000 euros (36,000 euros per year) the thing is certainly complicated. In this case, if you put your money in a product with an annual return of 6% and assuming something you should have a saving of 600,000 euros.
As you can see, high amounts that not many people can afford, but perhaps they will serve to make you a composition of place of that reality.
There is also another obstacle. Profitability and risk are closely related, at least in the short term. If you were thinking about passive management as a way to live from your short-term investments, you should think twice.
40 years age dream job life savings revealed
The reason is that indexing will make your investments literally depend on what the market does, which doesn't have to be stable. In other words, you can find periods when you lose money, a lot of money.
Considering that your income will depend on your investments and that you need them every year, it may not be the best idea. That is precisely why when talking about generating recurring income the idea of buying an apartment to rent usually arises. Of course, to do so you will also need a good initial capital of entry.
40 years age dream job life savings revealed
More news:
MásMóvil's takeover bid on Euskaltel goes ahead creating a fourth strongest operator in the middle of the price battle of the sector
MásMóvil's takeover bid on Euskaltel has gone ahead. Around 98% of Euskaltel's shareholders have taken part in the takeover bid, so it is now expected that the operation and integration will take place in the coming months and Euskaltel will be excluded from the stock exchange.
This move creates a fourth strongest operator in the Spanish telecommunications market. The resulting group will have an annual revenue of about 2,700 million euros and about 14 million lines. Másmóvil, controlled mainly by KKR, Providence and Cinven, needed at least 75% to take over the Basque operator, but it has far exceeded that figure, reaching almost 98% of Euskaltel, a percentage that could even rise slightly with the latest acceptance count data.
MásMóvil launched on 28 March a public offer to acquire shares in Euskaltel. The takeover bid valued the securities of the Basque operator at 11.17 euros, which raised the total price of the company to almost 2,000 million euros. This amount offered by MásMóvil represented a premium of 26.8% on the weighted average price of the shares in the previous six months.
When the offer was launched, MásMóvil had already reached an acceptance agreement with the big shareholders of Euskaltel: Kutxabank, Corporación Financiera Alba and Zegona. This meant having 52.32% of the capital. Although the offer stipulated that in order for the takeover bid to go ahead, it was necessary to have the support of 75% plus a share of the capital.
MásMóvil's takeover bid on Euskaltel comes with the telecoms sector scrambled with information and rumors about a possible merger operation between some operators due to the low cost war that exists in the market. Although it was aimed at a marriage between MásMóvil and Vodafone, finally the movement has been with Euskaltel.
Following the announcement of the takeover bid at the end of March, the bid received all relevant regulatory authorizations. The CNMC (Comisión Nacional de los Mercados y la Competencia) did not place any restrictions on the operation, considering that Euskaltel's presence is mainly focused on its territories in northern Spain.
On the one hand at the national level, it points out that MásMóvil strengthens its position as the fourth operator in the retail markets, and Euskaltel's presence was still limited, so the addition of quotas "will not be very significant", it indicates.
He added that in the case of Asturias, Galicia and the Basque Country, where Euskaltel has an important market share in the retail field and a strategy that presents different aspects with respect to MásMóvil, there are other significant operators that will continue to exert competitive pressure.