Your 3-million calculation is ignoring all returns on your money.

Yes, it is. Which is meant as reserve ;) Because I do expect life to become a lot more expensive over time.

@TomTom You are approaching paranoia in (a) avoiding even low-risk returns on your investments + (b) adding another 1.5M as 'leeway'. For most people this type of thinking would add decades onto their retirement age, so what you see as conservatism I see as being pretty grim.

What exactly is the problem with living on $40K per year? Granted, I'm single with no kids, but I doubt that I've ever spent that much in a year, even when I made a good deal more. Currently I live quite comfortably (in a moderately high cost of living area in the US) spending about $25K/yr.

Whether true or not (I suspect not), spending 300k on cars proves you have no real head for finance and should be totally ignored. Would down-vote 100 times if I could.

@jamesqf That is nice - but that is (a) single and (b) young and (c) naive. Lets go from the start. He said wife and future children. You expect both to cost 0? And health care goes up with age - unless you want not to get all the sicknesses old people get. And lastly, define comfortably :) But seriously, look at what children cost and what healthcare costs once you are older and then go on dreaming about 40k being ok.

@TomTom One time? You said in your answer that you want to buy a new car every few years... I think you need help.

@TomTom: Thank you for the compliment (at least I take it as such :-)) but I left off being young quite some time ago. At least according to the calendar: psychologically, I'm still refusing to grow up. But I could collect Social Security if I needed it. "Comfortably" includes a nice house with garden in a rural area, dogs & horse, &c. I grant that I'm more likely to pay $3K than $300K for a car, and when I go somewhere I'm much more likely to stay in a tent than a 5-star hotel, but that's because it's what I like.

@TomTom: In your answer above, you write of wanting to spend 300K (I'm assuming USD, no?) on cars for your 50th birthday. And I prefer to treat myself according to my desires, rather than spend money on something I don't actually want or need simply because I have the money. But I do agree about not retiring. The great thing about being financially independent is that it lets me choose interesting jobs :-)

@jamesqf Yes, on my 50th birthday. How often do you celebrate that one? THAT is a once in a lifetime and it does involve not only upgrading my daily workhorse,m but also basically getting my dream car. The 50th birthday should have made it clear that this is a once a lifetime thing. WHile the replacement - let's say my wife and me love travelling by car. And cars do get old. But that is separate ;) The error is assuming that I want to spend that on cars every couple of years. Heck, I may well, if my last year income stays where it is per year, But that would be luck ;)

@TomTom, half of the US GROSSES less than $60,000 a year. Suggesting a family can't live on net $40k plus a spouse's income (assuming the spouse contributes to the familial expenses) is completely contradicted by reality.

Half of the US is also not retiring with 37, you know. And while you can live from it, it is gross neglect to actually try to live on it if ou only have a million saved and give up a very high paying job for that. Yes, you can have a meager every person existence - but you will not go back to that kind of high paying job normally and if something goes wrong you have a problem. Oh, and forget putting your kids on a decent schooling. Because that is another thing half of the US is not doing. And how many of those half get food stamps or other aid, that you will not get with a million in assets?

This is the problem with having money. Poor people get a lot of money OUTSIDE their income. With moeny on the bank, you have to pay it all for yourself.

@Cloud it might not be the most financially prudent to paranoid decision he could make, but given his financial situation a once in a lifetime transaction of 10% of his current savings and only 20% of his projected paranoid extra cash on hand beyond what he'll need in retirement isn't likely to cause a disaster. After a certain point more money's just a way to keep score. In similar circumstances I'd probably be making a down-payment for a seat in once of Virgin Galactic or Blue Origin's upcoming tourist rockets.

While I'm unlikely to ever be able to splurge out on something that big, what I've done in the past the few times I've planned for something well outside my normal spending patterns has been to save for it separately by reducing my normal discretionary spending for a year or three in advance so that my long term savings are unaffected.

@DanNeely That is a NICE idea, though I am not sure it is a good one. Depending on age you may get much more interesting things if that is a once a lifetime thing ;) SpaceX is really making progress.