# Do you have a walk-away number?

@Phoenixheart1 (18)

Bulgaria

November 28, 2012 8:01am CST

Those of you who have watched Wall Street 2 surely remember the following dialogue:
Jacob: What's your number?
Bretton: Excuse me?
Jacob: The amount of money you would need to be able to walk away from it all and just live happily-ever-after. See, I find that everyone has a number and it's usually an exact number, so what's yours?
Bretton: ... ... More
So the idea is that everyone has a walk-away number meaning how much money one would ideally want to live off of, to live as lavishly or as comfortably as he/she wanted to.
I seriously thought about it but I have absolutely no idea what my number is. A net worth of $1mn or $10mn or $100mn seem all the same to me. Could it be that I don't have a number?
Anyway, for the sake of fun, what is everyone's number?

2 responses

@doroffee (4230)

• Hungary

28 Nov 12

I'm not sure. I should live alone and keep myself for some time to figure it out. But I'm gonna tell what I would need to be 100% content with, to live a lavish, deeply rich lifestyle:
-a nice house with a bedroom, a living room, a room for my memories and clothes and make-up, a kitchen, some spare rooms, a spacious bathroom with a bathtub and a cinema room
-internet access, TV, cell phone
-proper food (I mean, healthy and delicious treats... with the occasional chips or nachos and sweets)
-enough money to go to the theatre at least 3 times a month, to be able to go to a quality hairdresser at least every 3 months, to go to a beauty parlour, to buy some higher quality make-up items and some clothes in a month
-to be able to buy books
-money for teeth whitening and laser hair removal

@owlwings (39870)

• Cambridge, England

28 Nov 12

It isn't difficult to calculate and can be done knowing the published percentage rates for investments and your minimum (or desired) annual income.
Start with your current income. Is it sufficient to meet all your outgoings? If it is (and you are reasonably happy with your current lifestyle), use that figure as a basis. If it is not, then how much more would you need (as a minimum) to live at a level which would be comfortable but not excessive.
Now research the percentage rate of return on investments offered by the high-street banks or other financial houses. You should look for investments which pay interest annually or monthly and you would ideally look for low-risk investments which are likely to be secure, even though their interest rates may be lower than some.
Let us say (for the sake of argument) that you could survive reasonably comfortably on $30,000 a year and that you could invest a sum of money at 3% per annum which would provide an annual (or monthly) income. Your 'number' (the amount you would need to invest in order to have an income of $30,000 a year) would therefore be:
$30,000 x 100 / 3 = $1,000,000 (a million dollars).
Of course, realistically, the cost of living is rising all the time and $30,000 now might not be sufficient in ten or twenty years time. On the other hand, you are not going to live for ever and, if you never spent more than the interest on your capital, you would die still owning a million dollars. You might decide that it was allowable to spend a little more than the interest earned each year as the cost of living rose. Arriving at a satisfactory 'walk-away number' would therefore be a little more complicated (but it is exactly the same calculation which mortgage lenders make every day to calculate the payments which should be made to discharge a loan in a certain number of years).