Well, if you’re rich enough to live off your savings, I’d quit just to avoid paying income taxes.
Errr…
Yes, the answer is so clear that the question is foolish. Do the math.
Take a million dollars, assume a 3.5% rate of inflation and a 20% capital gains tax, see how long you can give yourself a “salary” of $30,000/year.
I didn’t say a million dollars was the amount that would take me out of the rat race. But if one has enough money socked away in savings and investments that one can continue to live the lifestyle to which they are accustomed, why not?
Yes, I know one has to pay income taxes on investment income. Sorry, I didn’t mean to hijack into a tax discussion. Either way, if you can work, work. One shouldn’t be forced to quit because one has reached a certain threshold of wealth.
Too late to edit… that should be a 15% cap gains tax.
Anyway, with the assumptions, a “million dollars” won’t last 20 years - and that’s assuming you can limit yourself to $30k/year, adjusted, regardless of health expenditures, etc.
By year 20 you’ll have to pull out $67,800 just to remain even with current dollar values.
If you retire at 65 and live to 90, you’re screwed. Royally. Imagine going back to work at 85 because you couldn’t be bothered to set up a simple Excel spreadsheet that tells you how foolish the question really is. 
The trick would be to put your money on Term Deposit at 10% p.a.
Australia’s Tax System is different to the US one AFAIK, but if you’ve got $1,000,000 in the bank at 10% p.a., that’s an income of $100,000 before tax. Given the way the tax system is structured, you’d basically be paying $30,000 p.a. in tax, giving you $70,000 p.a. net income. *
I don’t know about you, but I’d be quite happy to live off $70,000 p.a. without having to go to work.
*I’m not a Tax Lawyer or Accountant, though, so I accept the actual figures may not be 100% correct. The principle behind it is, however, sound- you could, I believe, live quite comfortably off the interest on $1,000,000
You know of a 30+ year fixed-rate investment that pays 10%?
Looking at Australian term deposit charts, I’m seeing 5 year terms that max at about 6%. With a CPI of 2.4%, that leaves an inflation-adjusted interest rate of 3.6%.
$1,000,000 * .36 = $36,000/year.
Doing the numbers in my head, that might last 15 years. Maybe. (I don’t know jack about Australian cap gains taxes, etc, so I’m not going to bet this weeks salary on this guess. 
)
Cite on term deposit rates: Interest rates | ANZ
Cite on Australia inflation rate: http://www.rba.gov.au/
Good on him. He can compete with them for entry level jobs and find out what it is like in the market place. I applaud him for not wanting to live out of Dad’s wallet and to be independant.
After all, he is a unique human being, not a clone of his parents.
You don’t go to major banks for the best Term Deposit rate, AFAIK- building societies and the like have been known to offer 8 and 9%, although I haven’t got any hard cites on that available since I’m not currently investing (I have seen someone- Heritage Building Society or Bendigo Bank; someone like that offering 7 and 8% returns, but not in the last 6 months). Even with 6% from ANZ or whoever, and a bit of shrewd share purchasing, my point stands that you could quite comfortably live off the interest from $1,000,000.
Sure, you couldn’t live in the centre of Sydney or Melbourne on that, but since you wouldn’t have go to work, you could live pretty much anywhere else you wanted.
And I’m inclined to agree with most people in this thread that the job market as a whole isn’t a zero-sum thing. On a local level, however, I believe it can be (There’s only so many McDonalds or Subway or Cafe jobs to go around in a small town, for example); but overall, people should be working and be as independent as they can.
No, your point certainly does not stand. Any long-term (greater than 1 year) financial calculation that ignores inflation is completely irrelevant.
Assuming a 6%, no-taxes-taken-out rate of return, you’ll earn $60k the first year. Sounds great!
But…
At Australia’s current CPI (cited above), in 10 years that 60k is… $47k. After 15 years, you’re earning $38,400, after 20 that decreases to nearly half its nominal worth: $31,200.
If your CPI doubles in years 5-10 (then reverts back to 2.4%), you’re even more screwed: Year 10 is worth $38,400, year 20 is a paltry $24,000.
Looking at the RBA website, the average rate of inflation in Australia from 1980-2006 was 4.7%, from 1922-2006 it was 4.2%. Using the historical average rate of inflation, the numbers come to this:
Year 1: $60k
Year 5: $47k
Year 10: $34,800
Year 20: $9,600
Cite on Australia historical rate of inflation: http://www.rba.gov.au/calculator/calc.go
Using a 2.4% inflation figure is dangerous because it is way below historical averages.
And the above is assuming no taxes, which is about as logical as assuming no death.
You missed my point about the judicious purchase of shares or other investments, using money made in the first couple of years. I believe my original point stands- if you got $1,000,000 from somewhere, you’d never have to work again, and still be able to maintain a comfortable standard of living, assuming you didn’t go on a globe-trotting spending spree or anything like that.
Using your figures, you’d have 10 years before your interest-only income dropped to about what someone working full-time would earn anyway, and you’d have a few more years after that before your income dropped to the point where you’d want to consider getting a job again.
And furthermore, if we assume you’re re-investing money you’re not using (say, you’re giving yourself an annual salary of $42,000 a year), then you’ve got a lot longer before it becomes an issue- and if we assume you’ve made a few investments in a properly diversified portfolio, you’re pretty well set.
At any rate, even if your income does eventually drop to around the $20,000 mark in a decade or so- by then you should have paid off your house (or most of it, anyway), leaving you with $384 a week to spend on whatever the hell you like, making you better off than a person earning $800 a week who has to spend $440 of that on the mortgage repayments, with the added benefit that you’re free to pursue whatever hobbies or pursuits take your fancy, and live almost anywhere you please without having to worry about getting a job there or commute times or any of the other things we all have to worry about in the course of our working lives.
And let’s not forget that, at the end of all of this, you’d still have the $1,000,000 to live off, which should cover you for at least another 10 years or so (allowing for inflation and so on), and that’s without using any of the money to buy shares, investments, or what have you. Some time before the $1,000,000 runs out, you’d be eligible to cash in your Superannuation and/or claim a Pension (assuming you were in your late 30s when you got the $1,000,000). Since your house would be paid off, your only expenses would be rates, bills, food, and medical costs.
You’d have to be the worlds most efficient budgeter, but I still believe it can be done.
Of course, the only way to know for sure is for someone to deposit $1,000,000 into my numbered Swiss Bank Account; I’ll get back to you in 2028 and let you know how I’m going. 
That’s a lot of assumptions to make in an argument where you haven’t even run the numbers and openly admit that you don’t follow your own advice.
You’re the one who brought up a “Term Deposit at 10% p.a.” despite the fact that you can’t cite a TD that offers 10%. Now you’re changing your assumptions, assuming that you can do whatever you want with the principal in a Term deposit (which you can’t, that’s why it’s a term deposit - the principal is left for the bank to use. (and before you start arguing country differences, a “TD” there appears to be the rough equivalent of a “CD” (Certificate of Deposit) here. At least the concepts are the same, but again, how they’re handled under your tax laws could be completely different - perhaps TD income is tax free?))
You then bring up other entities that offer the thing at slightly higher rates, apparently ignoring the fact that they have to offer the higher rates because a TD invested in a “building society” is a far riskier investment than one offered by a large bank (which is riskier than gov’t backed securities (depending upon the gov’t, of course)). How much risk do you want to take on with your retirement money when you’re retired?
You then assume that in 10 years, your inflation-ravaged income will be “everyone earns anyway”, completely ignoring the upward pressure inflation will have on wages - sure, “everyone earns anyway” $35k/year now, but in 10 years, they won’t be. You’ll be making $35k in a world where everyone earns $52k (Assuming a 4.2% rate of inflation and a starting wage of $35k).
And, of course, there are the magical “other investments”, which you’re using to close the gaps in your mathematically deficient argument.
Good deal!
And let’s go with this:
I have a million-dollar net worth and I definitely still have to work, even though my house cost less than 6 figures when we purchased the thing a decade ago.
Honestly, do you really think a mere million dollars is going to support a three-person family for 35+ years?
Difference between you and me: experience vs. assumptions. Don’t try this at home.
I was thinking of a single person- obviously the figures don’t work for a family.
And I’m not talking about $1,000,000 net worth- I’m talking about $1,000,000 in cash, in a bank account. Different kettle of fish to $1,000,000 net worth, IMHO.
Still doesn’t work, not at any level I’d find comfortable (talking U.S. dollars). Which may be part of the problem - when you have the type of income that supports gaining $1M in savings, you tend to have a different level of comfort. And unless you are intending to remain single amd unconnected for the rest of your life, doesn’t account for “life may change.” The people I know with lots of money and no kids start to feel obligations to neices and nephews college funds.
The money from Mom and Dad may come with strings - that isn’t at all unusual. Mom and Dad may use the purse strings to control his friends, control where he spends his vacations and disapprove of his girlfriends (or boyfriends).
And there are tax considerations - at least in the U.S. Mom and Dad can only pass $12k each on to him (yeah, $24k is a lot of money tax free, but as I said, it may come with strings), then they start having to use their unified credit. Employing him gets around that, but then he has to work in an accounting firm, and Mom and Dad may not want to promote the sort of atmosphere that “our son gets a good job here that pays well and he isn’t interested in actually doing” creates within their company (I wouldn’t - nothing hits morale like the boss employing their slacker kid with a good salary).