90. I’ll Retire with $30M: Here’s How

May 25, 2023

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The following article may contain affiliate links or sponsored content. This doesn’t cost you anything, and shopping or using our affiliate partners is a way to support our mission. I will never work with a brand or showcase a product that I don’t personally use or believe in.

How do you calculate what you need to retire?

And once you do that, how do you even get there?!

One of our biggest viral videos on TikTok was founder and host Tori Dunlap, sharing about her $6 million retirement calculations –– and that was if she never added another penny to her brokerage accounts. The comments were flooded with “the math isn’t mathing” and “How are you getting these numbers?” 

So we decided to break down some of the most common investing language like the Rule of 72, Dollar Cost Averaging, and more to help you feel more confident in your investing choices.

If you’re hoping to learn more about investing beyond what we shared in today’s episode or Tori’s book, join us in Stock Market School! Stock Market School is a year-long membership to a community of fellow Financial Feminists.


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[00:00:00] Tori Dunlap: Hi, financial feminists. Welcome back to the show. I’m so excited to see you as always. I think this comes out, this should come out in summer, so I hope you’re enjoying the summer weather I am in Seattle where it’s constantly testing, like, is it summer yet?

[00:00:16] Like, we get a little taste of it, and we’re like, mm, this tastes good. Good. And then it’s like, no, it’s going to rain again. So hopefully we’re actually in summer by the time we’re actually releasing this episode. If you are a oldie, but a goodie welcome back. If you are new to the show, hello, welcome.

[00:00:31] My name is Tori. I’m a money experts, a millionaire. As you can see, if you’re watching this on video Timothee Chalamet, I’m a obsessed person. I have my Timothee Chalmaet, my cardboard cutout, as well as my devotional candle behind me. We’re just really excited to have you. We talk about. Money, of course, but we also talk about feminism and how you have to manage money and think about money different as a member of a marginalized group.

[00:00:54] And so we’re just really happy to have you here. 

[00:00:56] Today on the episode, we’re talking about how I, as a 28 year old, am going to end up retiring with over 30 million dollars if I never contribute another penny. And we’re going to talk about how you can emulate that in your own life about how much you need to have saved for retirement, about how compound interest works.

[00:01:15] And no, you don’t actually need to like have 30 million in cash. We’ll talk about all of that. This was kind of inspired by our most viral video ever, which was me a couple of years ago saying that I was 26 years old and will have 6 million by the time I’m set to retire and how I was able to calculate that, how I was able to do it.

[00:01:39] A lot of the people in the comments of that video were like math ain’t mathin They’re like, I don’t understand how this is possible. Also, I don’t understand how you can for sure say that you’re gonna have this amount of money. And also, aren’t you already 65 already because you look like a hag? Those were some of the real comments, which was very, very, Lovely.

[00:02:01] Thank you. If you feel like I look 65 already, we’ll just wait until I’m actually 65. So if you’re that person also who’s like, I don’t understand how you’re able to calculate that. Also, that seems like a shit ton of money. How are you getting that much money this early? Let’s break it down. So, first, a couple common misconceptions about investing.

[00:02:22] We are going to talk very briefly about some investing misconceptions. We have an entire free workshop that breaks these down and breaks down how to get started investing and we’ll link it down below in the show notes.

[00:02:33] And whenever you’re listening to this, you can get access, just click the link down below. Couple misconceptions about investing. One, it’s gambling. Some investing is gambling. The kind of like, pick the hot stock, pick the like hot new thing. Anything that basically seems sexy or that the wolf of Wall Street would approve of, that is not investing, it is gambling.

[00:02:57] I talk about this in my book as well, but the thing about investing is that it should be over the long term. It should be over years, if not decades. And so if you are playing the investing game thinking like, Okay, I’m just going to pick the hot thing for a day or a week or a month, and then I’m going to pick the other hot thing.

[00:03:18] That is not investing, it’s gambling. And frankly, it’s extremely anxiety inducing too much time and effort, and also it does not perform well. We know statistically that thinking about investing for the long term and choosing well diversified investments is the thing that performs well rather than chasing the hot commodity.

[00:03:39] So is investing gambling not how it’s

[00:03:48] Again, investing should be consistent and stable over a long period of time. One of the other misconceptions is that you have to watch stocks like a hawk and make it like your full time job. No. The answer is no. You don’t have to do this. For me personally, what I’ve realized is that I don’t want to play the individual stock game, like I was saying before, they do not perform well.

[00:04:11] There are too much work and effort and also I just have other shit to do. It’s not necessarily a smart investment to again be chasing the stock. We also want to think about investing again for the long term. So it’s performance on a random Tuesday or even in a month or even in a year doesn’t matter that much in the grand scheme of things.

[00:04:32] in the years, if not decades, that you’re investing. So even me, as a financial expert, I check my investments about once a month. And yes, I’m checking their performance, but I’m really just checking to see like, is everything going okay? And also, can I start investing more? We talk more about this in our Stock Market School, which we’ll also link down below, but there’s a way to start checking your investments that doesn’t feel, again, anxiety inducing or stressful.

[00:04:56] It’s just like a simple like, okay, everything’s good. Cool, moving on. It’s kind of like a doctor’s appointment. It’s just like, it’s like an annual checkup. It’s just like, cool, everything’s fine, we’re going to keep moving. I’ve mentioned this already in this episode, another common misconception is it’s like Wolf of Wall Street and Leo DiCaprio yelling on the phone.

[00:05:13] It’s not that. My not so conspiracy conspiracy theory is that men, and specifically finance bros named Chad, have literally told you that investing is difficult or complicated in order for you to A, not do it, and B, pay them to do it for you. The vast majority of people who are literally investing, like, like stock brokers, they work in the
financial services industry.

[00:05:41] They do not perform, like, they’re not good at their job. We know this from statistics. I found all of these, like, stats when I was researching for my book, but literally the very people that are trusted to manage your money and pick stocks, very rarely are actually good at their job and don’t, like, do it.

[00:06:01] So, the not so conspiracy conspiracy theory is that they tell you it’s complicated so that they keep their jobs and so that you are gate kept out of investing, when really you can manage this yourself, you just need somebody to teach you, whether that’s me or somebody else. And finally, one of the other misconceptions is, oh my god, we’re in a recession, so it’s a bad time to invest, or like, investments aren’t performing great, so now’s not a good time to get in.

[00:06:28] Couple things. One, if we’re thinking about this in terms of years, if not decades, again, it does not matter what happens in a random period of time. We know from statistics that over every 20 year period, every 20 year period, even a 20 year period that included 2008, or the dot com boom and bust, or the Great Recession and Depression, We know that over every 20 year period, you have been 100% likely to make money on the stock market.

[00:06:56] So what is the key to making money on the stock market? Patience, right? So again, what happens on a random day doesn’t really matter. In addition, stocks are on sale. I have said this before on our social media platforms. Millionaires will be made right now. Millionaires will be made when stocks are on sale.

[00:07:17] Now is actually a great time to start investing because if a coat is 100 normally and suddenly it’s 50, well, it’s a great time to buy that coat. So if you are that person who is hesitant to get started investing because you’re like, Oh, it’s not performing great. Well, cool. Think about it as a long term thing.

[00:07:35] Think about it as 10, 20, 30, 40 years. and realize now is actually a great time to get started investing because your investments are going to be cheaper. So is now a bad time? There’s no such thing as a good time or bad time to invest. You just need to get started. We’ll explain what dollar cost averaging is in the little bit, you just need to get in and you need to ride whatever waves are coming.

[00:08:04] Okay, so let’s talk about my 6, 000, 000 at 26, my 30, 000, 000 at 28, how I was able to calculate that. So in investing, in the investing world, there is what’s called the rule of 72. The rule of 72 is how you calculate how long it’ll take your money that is invested in the stock market to double. So 72. It needs to be divided by the average return you can expect on the stock market, which typically is 7 to 8 percent.

[00:08:40] Some people are as aggressive as 10 percent. Some people are as conservative at 5, at 5 percent. We tend to go here at Her First Under K and other financial experts tend to say that you can expect about a 7 to 8 percent return. So if I take 72 and I divide it by 7, that’s roughly 10, right? Easy math, roughly 10.

[00:09:01] That means that every 10 years, I can expect my money to double. I can expect my money that is already in the stock market to double every decade. So, Her First Under K, right? The Her First Under K origin story was me saving 100, 000 at age 25. I have an entire episode about how I did that linked down below.

[00:09:23] So that 100k at 25, if I never invested another penny, it would be 1. 6 million by the time I’m at retirement age 65. Because let’s walk you through this. Okay, if it doubles every 10 years, so when I’m 35, that original 100k will be 200k. If I’m 45, now we’ve doubled it to 400k. If I’m 55, we’re at 800k. And 65, right, 800k times 2, we’re at 1.

[00:09:52] 6 million. How we know this is because of compound interest. We’ve explained compound interest many a time on this show, but as a refresher, compound interest is simply when your interest earns interest earns interest, right? It’s what takes that original 100k, And allows it to grow to something that’s almost 2 million without you never having to contribute another penny.

[00:10:17] It’s also why time is so much more important than the amount of money when it comes to investing. One of the misconceptions that we hear a lot is, Oh, I need tons of money to start investing, I need thousands of dollars. You don’t. You just need to start, even if that’s a couple hundred dollars. Because I’m not actually, with that 100K, putting aside 1.

[00:10:37] 6 million myself, right? I am not taking 1. 6 million in cash and putting it in an investing account. Instead, I’m taking, in comparison, a relatively small amount of money, 100, 000, and allowing it to grow using compound interest. Now you might be thinking, Tori, I’m not in my twenties, or Tori, I don’t have a hundred K.

[00:10:57] That’s insane. Compound interest works regardless of age and regardless of the amount of money. Compound interest works whether you’re 18 or 88 or somewhere in between. And compound interest works whether you have 100 or 100, 000. But you don’t get any compound interest unless you actually start. You don’t get to benefit from compound interest at all if you’re not actually invested.

[00:11:23] So, if you’re wondering how long it’s going to take your money to double, use that rule of 72. 72 divided by the average return you can expect, which I, for easy math, am saying is 7%. That’s roughly every 10 years. So, if you’re wondering how much will my money be, the money that I do have invested by the time I’m set to retire, that’s how you figure that out.

[00:11:46] Now, how much do I need for retirement? How much do I need to actually retire? How much do I need to have in my investing accounts? Well, here’s the thing. A lot of people think, Oh, when I am a millionaire, I can retire. Nope, it’s not true. It is dependent on your situation, on your expenses, on a lot of different things.

[00:12:07] It is not a like, I’ve reached millionaire status equals I get to like submit my notice and like ride off into the sunset. I wish it was that simple. Instead, what you need to do, is calculate using another rule called the 4% rule. 4% is the average we are assuming inflation is year over year. However, we know that recently inflation has been much higher than that and much stickier than that.

[00:12:37] So, in order to figure out how much do I need to retire, I 25.

[00:12:45] For any, like, math whizzes out there, we’re basically taking the 4% rule and, right, like, kind of reversing it, right? So if I’m spending 50, 000 a year on everything from my necessary expenses, right, my housing expenses, my groceries, my daycare, my insurance, to, like, fun expenses, right, vacations, or you know, food out, or going out to bars, right?

[00:13:11] If that is 50, 000 a year, If I multiply 50, 000 by 25, I’m going to need roughly 1. 25 million to retire. Now, this is just, I want to be clear, a general rule. This is like a good get you started kind of thing. I don’t want you to like call me up and be like, Hello, I quit my job when I reached exactly 1. 25 million and now 10 years later, like I, this is not the actual number I needed, right?

:13:37] It’s just a general rule. It’s a general idea of where you should be. I am saving more than that, you know, expenses times 25 number for a couple reasons. One… My expenses are probably going to increase. Right now, I’m a single person. I am not married. I don’t have children. Right? So, my expenses might increase.

[00:13:56] Especially if I choose to own property. Right? Houses are expensive. The other thing is that the healthcare costs associated with getting older are substantial. Right? So, my, if I’m saying, okay, 50, 000 a year are my expenses, When I’m 55, 65, 75 and I have a lot more health related expenses, I’m going to need to increase that number, right?

[00:14:21] This assumes that I am like living the same life that I am living now even as I age. So I want to give myself a little bit of a buffer. So what you can do at home is in addition to that rule of 72 of figuring out like how long is it going to take your money to double, you can calculate how much roughly am I going to need.

[00:14:41] to have saved or invested, really, for retirement before I’m, I’m exiting. You have probably heard us talk either on my book, in my book, or on this podcast about the financial independence retire early movement, which is this idea of like getting out of the workforce, living off of your investments before the typical retirement age of 65.

[00:15:04] How people were able to do that is they saved that retirement number before Standard retirement, right? They were able to get to that 1. 25 number, or whatever that number looked like for them, decades earlier, or at least years earlier. This is how I can say at 28 that I could retire tomorrow because I have my retirement number already saved.

[00:15:29] I have my retirement number already in my investments. Now, of course, I’m continuing to work because I love my work. I love my team. This is something that I enjoy doing. This is my life’s work. And also because, although I’ve hit that number, I might need something else later, right? I might need a bigger number because my lifestyle will change.

[00:15:50] So let’s explain what I referenced before, which is dollar cost averaging. Which is this idea of like, getting in the stock market, when is a good time, when is a bad time. I want to be clear, there’s never a great time, and in that, there’s never a bad time to get started. You just need to get started.

[00:16:07] Dollar cost averaging is this like, jargony rule that basically says, when you get in, It’s a great time as long as you’re consistent.

[00:16:18] We say in the personal finance industry that time in the market is better than timing the market. Time in the stock market is better than trying to time the market. Dollar cost averaging just assumes that if you put in some money today and put in some money in like, let’s say a month and put in some money in the month after, it’s all going to average out.

[00:16:37] So yeah, you might have investments, you might put in money in the stock market at a time where the investments aren’t performing great. But you will also put money in the stock market at the time where the investments are performing magically and beautifully. Dollar cost averaging is exactly what it sounds like.

[00:16:52] It’s going to average out, but the key is to be consistent. So if you’re that person who does have a little bit of money and is looking to invest and you’ve just been waiting for the opportune time, the opportune time is now. The opportune time is now. So we need to just get you started investing as opposed to you waiting for like the magical great performance time.

[00:17:14] And as a reminder, your stocks are on sale, right? It’s actually a great time to start investing when your investments are a little up and down and not performing as great as they might in like a normal month. And again, normal is subjective with all of this because it goes up, it goes down, but we can expect an average of a 7 to 8% return over the course of investing.

[00:17:41] This is the other thing I see is that we will do content at HerFirst100K where we’re like, hey, if you put in your Roth IRA, if you put an X amount in your Roth IRA, here’s what that’s going to be over five years, 10 years, 20 years, 30 years. And people are like, I don’t know how you’re a I’m assuming a 7 to 8 or even 10% return.

[00:17:57] That doesn’t make any sense. Where are you getting 8% right now? And I’m like, it’s not about right now. This is the big, if you take one thing away from this episode, investing is not about right now. It is about over the course of years, if not decades. And we can expect 7 to 8%. And actually we’ve seen as high as 10 to 12% on average as you move through your years of investing.

[00:18:21] As we near the end of this episode, here are a couple of the actionable things I need you to do. One. If you have not got started investing, I need you to get started. This is like me putting on my, like my serious hat here, but here’s the deal.

[00:18:35] You will not be able to retire if you don’t invest. The average person will not be able to retire if they don’t have something saved for their retirement. And I would like to stop working. And I know y’all would like to stop working at some point too. You can’t retire if you don’t have anything invested.

[00:18:52] So, if you have not started investing, I need you to get started. As a reminder, you don’t need a bunch of money to start. You just need a little bit of money. Time is way more important than the amount of money. And, if you’re listening and you feel like you’ve run out of time, something is better than nothing.

[00:19:07] I need you to get started. Every day you do not start investing, you are losing money. And that sounds like fear mongering, and I’ll fear monger if I have to to get you started investing. But truly, like, every day you don’t invest, you lose money. So, take that 50, 100, 200. Maybe you have a couple thousand dollars and you’ve just been waiting.

[00:19:26] Start investing. 2. When you’re considering how much money I need for these certain goals, like retirement, a reminder that compound interest will do some of that heavy lifting for you, right? I would argue a good chunk of that heavy lifting, especially if you give yourself as much time as possible. And if you start today, you’ve given yourself as much time as possible, right?

[00:19:51] But compound interest doesn’t work if you haven’t gotten started. Can you tell that just the theme of this is just get started? If you have already started investing, amazing, start investing as consistently as you can. Consistent is whatever that looks like for you. Consistency doesn’t have to be on a planned schedule, although that’s lovely, right?

[00:20:10] Maybe it’s every time you get paid or once a month. But maybe consistent is just, I will consistently invest when I get extra money, right? When I get that raise at work and when I get, you know, a couple checks from my grandma on my birthday and Christmas, right? Like, uh. excuse me, Jesus Christ. That was, that happened out of nowhere, we can keep that in.

[00:20:32] That was terrifying. I didn’t even know that was coming. I am so sorry, excuse me.

[00:20:41] I’m going to take a little drink of water. Wow. Kristen’s like cackling at me behind the seats. Okay, I’m so sorry, hello. Investing plus burps. Okay. What was I saying? I don’t even remember. Investing, compound interest yeah. As much time as possible. It’s going to be huge.

[00:20:59] If you are that person who is panic Googling, how do I get started investing? What is the best investment for me? I logged into my Vanguard account and all of this makes no fucking sense. Well, that’s why the Stock Market School exists. I’m here to guide you. Step by step through investing literally live on workshops with me live and coaching with me.

[00:21:17] It’s a year of investing education with me and our community. It is available at the link down below and if for whatever reason that is not something you can but don’t invest in We have an entire chapter around investing step by step in my book Financial Feminist We’re available wherever books are sold or also available at your local library Here’s the thing though I need you to again get started like I said before and I need you to stop letting Analysis paralysis get in the way of you getting started This is the number one thing we see is fear.

[00:21:49] The number one reason women don’t invest is fear. Fear of getting started, fear of making a mistake, fear of losing money. And if that is you, you are not alone. That is literally like every community member who has not invested yet. Every First 100k community member who has not invested, if I were to poll you, you are scared.

[00:22:04] And that’s totally understandable because again, this information has been gatekept from you. You’ve been told it’s complicated. And overwhelming so that you don’t do it. You’ve been told that it’s just for dudes and bros who have finance degrees. And I can tell you as someone who had someone teaching her, which, who was my dad, and who researched and kind of taught herself, You just need somebody to teach you, like I had my dad teach me.

[00:22:32] You don’t need a finance Chad to come save you. You just need to get started and overcome that analysis paralysis and make a decision. My final note is that there is no like wrong investing decision, except you making no decision at all. If you’re worried about making a mistake, the worst mistake you can make is making no choices.

[00:22:54] The worst mistake you can make is doing nothing. So if you haven’t started investing yet, I can’t wait to see you over in stock market school, or at the very least, getting some information, whether that is our free workshop down below, more episodes of this podcast around investing, reading the financial feminist book or consuming resources from many other personal finance experts that are fantastic.

[00:23:16] Or if you’re investing already, amazing. Keep doing it consistently, maybe up your retirement contributions by 1%, right? Keep investing, keep progressing towards that goal of having. a certain amount saved by retirement and allow compound interest to work harder for you. We appreciate you being here as always.

[00:23:34] If you have more questions about investing that you’d like us to answer in future episodes, feel free to leave us a voicemail that is also linked down below in the show notes. TLDR, we’re excited to have you investing. We need you to get started. We’re here to guide you every step of the way. Thanks for being here.

[00:23:49] Hope you have a great day and we’ll talk to you soon. 

Tori Dunlap

Tori Dunlap is an internationally-recognized money and career expert. After saving $100,000 at age 25, Tori quit her corporate job in marketing and founded Her First $100K to fight financial inequality by giving women actionable resources to better their money. She has helped over one million women negotiate salary, pay off debt, build savings, and invest.

Tori’s work has been featured on Good Morning America, the New York Times, BBC, TIME, PEOPLE, CNN, New York Magazine, Forbes, CNBC, BuzzFeed, and more.

With a dedicated following of almost 250,000 on Instagram and more than 1.6 million on TikTok —and multiple instances of her story going viral—Tori’s unique take on financial advice has made her the go-to voice for ambitious millennial women. CNBC called Tori “the voice of financial confidence for women.”

An honors graduate of the University of Portland, Tori currently lives in Seattle, where she enjoys eating fried chicken, going to barre classes, and attempting to naturally work John Mulaney bits into conversation.

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