What's next for Toby Gerhart? - Printable Version

What's next for Toby Gerhart? - Printable Version

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Re: What's next for Toby Gerhart? - DC - 03-09-2016

(03-09-2016, 10:27 AM)winflop link Wrote:[quote author=stupac2 link=topic=14712.msg158161#msg158161 date=1457542809]
If I had as much money as he'd made I'd sock it in an index fund and live off the interest for the rest of my life. Hopefully he's invested wisely.

Re: What's next for Toby Gerhart? - BostonCard - 03-09-2016

(03-09-2016, 07:23 PM)Roberton3 link Wrote:[quote author=Boston Card link=topic=14712.msg158231#msg158231 date=1457571038]
...I have a friend who is being recruited to a faculty position in Denver, and the real estate agent who they met with said that she would not be able to find a house as modest as they have now (they have a three bedroom/~1500 sf house, which, because they have no kids, is plenty comfortable for them) for the amount of money they have available.Â So, they have to weigh getting more of a house than they need or want versus paying taxes on the capital gains from the house they bought...

This is going well OT, but your friend should talk with a competent tax advisor.Â Based on what you wrote, it sounds like he/she is basing decisions on a tax law that was changed almost 20 years ago.Â Under current law, the purchase price of your new house has no effect on whether you'll pay capital gains on the sale of the old house.
[/quote]

That might have been the real estate agent, pushing them to get more of a house than they need.Â But you are correct that the first $500,000 of capital gains should be exempt from taxes.Â They bought at a good time, shortly after the bubble burst, and there has been crazy real estate appreciation in the Bay Area in the last few years, but I doubt their gains would be much more than $500k.

BC

Re: What's next for Toby Gerhart? - BostonCard - 03-09-2016

(03-09-2016, 07:23 PM)Roberton3 link Wrote:[quote author=Boston Card link=topic=14712.msg158231#msg158231 date=1457571038]
...I have a friend who is being recruited to a faculty position in Denver, and the real estate agent who they met with said that she would not be able to find a house as modest as they have now (they have a three bedroom/~1500 sf house, which, because they have no kids, is plenty comfortable for them) for the amount of money they have available.Â So, they have to weigh getting more of a house than they need or want versus paying taxes on the capital gains from the house they bought...

Re: What's next for Toby Gerhart? - stupac2 - 03-10-2016

(03-09-2016, 08:52 PM)DC link Wrote:[quote author=winflop link=topic=14712.msg158167#msg158167 date=1457544464]
[quote author=stupac2 link=topic=14712.msg158161#msg158161 date=1457542809]
If I had as much money as he'd made I'd sock it in an index fund and live off the interest for the rest of my life. Hopefully he's invested wisely.

Looks like he's made about $11M total.Â Probably not enough to fully retire on, plus I doubt at age 28/29 he's out of career options or interests

http://www.spotrac.com/nfl/jacksonville-jaguars/toby-gerhart/
[/quote]

Sounds like a lot of money, but that is only if you are somewhat close to retirement age.Â At 28/29, he should plan for the possibility that he could live another 60 years, and continue adding to his wealth.Â The money won't seem like that much 50 years from now.
[/quote]

Nope, he really could retire on that and live a really quite good life. I'm really surprised at how much people on this forum think you need, are you guys throwing Love Boat parties every weekend or something?

Let's actually do the math. Let's say he paid 40% taxes on that, so it's "only" $6.6M. Football players get most of their food and things paid for, so he'd just need housing in pretty cheap markets and some transportation, and he doesn't seem like the Lambo type so assume he's managed to live off of $600k and has $6M in the bank (which also assumes no endorsements or any other income at all, probably wrong, I bet this is a lowball).

Now let's say he wants to live a comfortable life in the Bay Area. He's smart, and knows that mortgage rates are so low that you're better off taking the nominal ~4%, and deducting the interest while investing what you would've spent. He buys something like a 3/2 in good shape with a decent yard, which would be ~$1.2M in the Oakland/Berkeley area (depending a lot on specifics), assuming 20% down (which the loan originator would probably still want) that's $4,500 per month, $54k per year. Let's assume that property taxes minus the interest deduction come out to ~$6k extra (based on my taxes I believe this is high), so $60k is his housing cost. How much non-housing money do you need per year?

I'm a pretty big dude, a little taller than Gerhart and probably, once he loses his playing muscle, about the same weight. My wife and I spent ~$10k on food last year (some of that is actually various other household but whatever). Our car is paid off, but gas and maintenance and registration were ~$3k. Say it's $5k, he travels a bit more and drives a bigger car, but still pays it off (or gets a loan that's low enough interest to make financing reasonable). Utilities aren't a ton, we paid ~6k this year, and I think that counts some weird time where EBMUD was billing us for two houses because they're incompetent. So let's say that's a high estimate.

I don't know if he's married, but say he is and is about to have a kid. I'm not sure why, if he's retired, he'd want/need daycare, but say he thinks it would provide socialization and he wants an enriching experience, pretty reasonable. The most fancy/expensive place near me is $3k a month, $36k a year. Okay, now how much do you spend on "other"? Shopping, home furnishing, vacations, etc. Since we just bought and started furnishing a house, plus are getting ready for a kid, our spending has been pretty high, and I'm having some trouble understanding Mint here, but it looks like we spent ~$9k. Call that annual.

All right, let's add it up, that's ~$116k. We didn't take any fancy vacations, maybe he wants to travel to Europe/Asia twice a year, so add like $24k for that. Round up to $150k because why the hell not? Capital gains on that would be 15%, right? So that's ~176k withdrawn from the account per year. What kind of return do you need to get to be able to live off that? Started with $6M, paid $140k for down payment, so he has $5.86M invested. 176/5860 = 0.030. So he'd need to get a 3% real return over time to be able to live off of it. Does anyone really think that's not doable? He'd almost certainly get at least 4%, in which case he'd be able to grow his principle with time (a smart move anyway)

Maybe you don't like my math above, maybe I've lowballed some things, though I tried to be generous. But I outlined a pretty good life! (In fact it's basically my life but with a bigger house and more vacations.) Sure, you can't have a mansion and 4 cars and a private jet on this, but why would you want to?

Re: What's next for Toby Gerhart? - stupac2 - 03-10-2016

(03-09-2016, 08:52 PM)DC link Wrote:[quote author=winflop link=topic=14712.msg158167#msg158167 date=1457544464]
[quote author=stupac2 link=topic=14712.msg158161#msg158161 date=1457542809]
If I had as much money as he'd made I'd sock it in an index fund and live off the interest for the rest of my life. Hopefully he's invested wisely.

Re: What's next for Toby Gerhart? - MustardtheBallCarrier - 03-10-2016

Stupac, I'll give you a mulligan on the cost of raising a family in an expensive area because it is new to you (and congrats on the new addition to your family).Â If you can make that budget work for you, more power to you.Â But, I think with some perspective on where money leaks when you have to support a family you will shake your head at what you wrote in this thread.Â Not that a family can't make it work (of course people make due on much less), but that what you think is a lot of money can disappear without extravagant spending.Â

Re: What's next for Toby Gerhart? - stupac2 - 03-10-2016

Dude, that's just ridiculous. I currently am doing this. I have plenty of friends doing this (on less, even). You don't need to make over 200k to make it in the bay area, and insisting otherwise is just ignorant.

Re: What's next for Toby Gerhart? - MustardtheBallCarrier - 03-10-2016

(03-10-2016, 04:19 PM)stupac2 link Wrote:Dude, that's just ridiculous. I currently am doing this. I have plenty of friends doing this (on less, even). You don't need to make over 200k to make it in the bay area, and insisting otherwise is just ignorant.

Re: What's next for Toby Gerhart? - MustardtheBallCarrier - 03-10-2016

(03-10-2016, 04:19 PM)stupac2 link Wrote:Dude, that's just ridiculous. I currently am doing this. I have plenty of friends doing this (on less, even). You don't need to make over 200k to make it in the bay area, and insisting otherwise is just ignorant.

Re: What's next for Toby Gerhart? - CTcard - 03-10-2016

I would propose that this whole thread misses the point for reasons other than what is a "reasonable" amount of money to live on somewhere.

Retiring at 28 is a pretty big blow to most people's sense of purpose. That's perhaps 60 years of doing ... nothing? The first few weeks would be pretty great, but that's a lot of weeks.

Of course there are all sorts of purposes other than work - and whether they qualify as "retirement" depends upon the details. On top of that, of course the reality is that many jobs do more to put food on the table than bring meaning to life. But one thing we are supposed to get from a Stanford education is the skill to make those things meld.

Though to be sure, neither I nor apparently anybody else here has any idea what Gerhart might wish for himself for the next several decades.

Re: What's next for Toby Gerhart? - stupac2 - 03-10-2016

(03-10-2016, 08:19 PM)MustardtheBallCarrier link Wrote:[quote author=stupac2 link=topic=14712.msg158324#msg158324 date=1457651966]
Dude, that's just ridiculous. I currently am doing this. I have plenty of friends doing this (on less, even). You don't need to make over 200k to make it in the bay area, and insisting otherwise is just ignorant.

Dude, nowhere did I say you need to make X to live in Y.Â I was careful not to say that, actually.Â I would never be that ignorant.Â You chastise me for my stupidly extravagant lifestyle because I choose to live in a nice area, live in a comfortable (but not especially large) house and pay for private school because the local public schools are not good and I want to give my children the best chance for success (all of which I can support on my wages, but not necessarily someone else's).Â No lambo in my one-car garage.

Sounds like you enjoy your lifestyle and biking to work.Â I'm comfortable too, and biking to work isn't an option for me unless I ride on the freeway.Â Stop being so judgmental and thinking that you've calculated the cost of a happy life and everyone else is an a$$hole.
[/quote]

You wrote something incredibly condescending and flat-out wrong about how much money it takes to live in an area like this (here's a hint, if you ever find yourself writing "oh ho ho you'll see when you get older!" then you're being eye-rollingly condescending). If you arrange your life in such a way that it takes that much money, then fine, it's your choice, but you don't need to and acting like you do is foolish.

(03-10-2016, 08:48 PM)CTcard link Wrote:I would propose that this whole thread misses the point for reasons other than what is a "reasonable" amount of money to live on somewhere.

Retiring at 28 is a pretty big blow to most people's sense of purpose. That's perhaps 60 years of doing ... nothing? The first few weeks would be pretty great, but that's a lot of weeks.

Of course there are all sorts of purposes other than work - and whether they qualify as "retirement" depends upon the details. On top of that, of course the reality is that many jobs do more to put food on the table than bring meaning to life. But one thing we are supposed to get from a Stanford education is the skill to make those things meld.

Though to be sure, neither I nor apparently anybody else here has any idea what Gerhart might wish for himself for the next several decades.

Did you read the article I linked? The point isn't to do nothing it's to do whatever you want. Maybe you want to write a book. Maybe you want to learn how to make furniture. Maybe you want to start your own artisanal pickle business. But virtually no one wants to work 9-5 in an office, and someone with $6M in the bank doesn't need to. They can lie on the beach or play golf forever on without worrying about money.

And maybe it worked out for you, but let me tell you there is fuckall out there right now for physics majors, I've been looking. People on here sometimes act like a Stanford degree is this magical unicorn that solves all problems, but it really isn't. I know plenty of people who had a really hard time fresh out of Stanford, and some are still underemployed. Unless you got a degree in CS there are no guarantees. Gerhart's most valuable asset is almost certainly that he's a professional football player, not that he has a piece of paper from Stanford, which honestly probably means close to nothing by the time you're 5+ years out of school. (I suppose you might be referring to some special qualities that Stanford imbues, but everyone here who hasn't thoroughly drank the koolaid knows that a Stanford education is marginally better at best than one from UCLA or Cal, and the main difference is relationships, which are pretty meaningless for millennials given our horrible prospects outside of tech.)

Re: What's next for Toby Gerhart? - stupac2 - 03-10-2016

(03-10-2016, 08:19 PM)MustardtheBallCarrier link Wrote:[quote author=stupac2 link=topic=14712.msg158324#msg158324 date=1457651966]
Dude, that's just ridiculous. I currently am doing this. I have plenty of friends doing this (on less, even). You don't need to make over 200k to make it in the bay area, and insisting otherwise is just ignorant.

(03-10-2016, 08:48 PM)CTcard link Wrote:I would propose that this whole thread misses the point for reasons other than what is a "reasonable" amount of money to live on somewhere.

Retiring at 28 is a pretty big blow to most people's sense of purpose. That's perhaps 60 years of doing ... nothing? The first few weeks would be pretty great, but that's a lot of weeks.

Of course there are all sorts of purposes other than work - and whether they qualify as "retirement" depends upon the details. On top of that, of course the reality is that many jobs do more to put food on the table than bring meaning to life. But one thing we are supposed to get from a Stanford education is the skill to make those things meld.

Though to be sure, neither I nor apparently anybody else here has any idea what Gerhart might wish for himself for the next several decades.

Re: What's next for Toby Gerhart? - MustardtheBallCarrier - 03-11-2016

Okay, Stupac.Â I can't keep up with your flexible reading comprehension.Â You win the thread.Â Good luck with your retirement planning.

Re: What's next for Toby Gerhart? - TriangleTree - 03-11-2016

I'm actually enjoying this thread, if not necessarily the acrimonious tone. Having said that, I think the tone shows precisely the high emotions that run behind it, which I see closely related to the polarization of political views on a grander scale.

I see both points of views.
One can easily argue that it is elitist and bordering on offensive to suggest that an income in the top 10th percentile (in one of the wealthiest countries in the world) cannot support a comfortable living. Plenty of people do and do amazingly well on much less.
On the other hand, it is very clear to me that a new priviledged class is breaking away from the pack that now has access to "priviledges" like private education, which used to be accessible to upper middle and even middle classes. Keeping up with that break away group, not in terms of comfort and extravagances but say, in terms of affording the same opportunities for ones' children, is becoming increasingly difficult without significant economic sacrifices (far from those that would be considered extravagant) even on the very nice incomes described in this thread. If that's how the upper middle class feels, how can the middle class possibly be coping?

Interesting times indeed, and as the political theatre is showing, somewhat worrying.

Re: What's next for Toby Gerhart? - Farm93 - 03-11-2016

Curious little thread.

Gerhart almost certainly will not just sit and do nothing.Â Speaking tours, coaching or any number of actual careers would be available.Â Doing nothing for 50 or 60 years would just be too much.Â

As the median household income, even in the Bay Area, is well below $200k per year, it seems very reasonable to project that one could retire on a nest egg that would provide more than that annually while preserving purchasing power.Â One could do that.Â I certainly plan on doing that using numbers remarkably similar to those noted by Stupac.Â I am confident others would need more.Â But by definition more than 50% of the people in the Bay Area could make Stupac financial math work, with or without, kids.Â And why would he need to retire in one of the more expensive places in the USA?Â A retirement plan in SoCal, Nevada or his current home state of Florida would make it laughably easy, for those with any financial discipline, to retire on $4 or $5 million.

That said, the real flaw in the calculation is not the idea that someone could not live on $~200,000 in the Bay Area per year.Â The real flaw is the idea that Toby still has $6 million from his $11 million of salary.Â An NFL player will have a number of expenses that would eat into that career earnings tally even if they are pretty frugal (Lawyers, trainers, advisors, nutritionists, etc.).Â

As a 29 year old he can easily get a pretty nice job where the former NFL player tag would help a lot.Â Many of those careers probably would only pay $80,000 to $150,000 per year.Â Though as I have read in this thread, those above average salaries would be equivalent to... living in a van, down by the river.

https://www.youtube.com/watch?v=3nhgfjrKi0o