Do you want to own Tesla stock and retire within the next 8 years by 2030? Many Tesla bulls believe in the company’s vision of a cleaner, more environmentally friendly planet and want to retire rich as a loyal Tesla shareholder.
In this article, I’ll explain how you can retire by 2030 if you simply own enough Tesla stock and do nothing else.
How Much Do You Need to Retire by 2030?
According to Annuity.org 1, the median American retirement income is around $47,500. That means you’ll need at least $4,100 per month to retire comfortably in a western country such as the United States.
If you live overseas or plan to retire in a foreign country then you could retire with a lot less money. Many Americans choose to retire in foreign countries such as Panama, Mexico, Costa Rica, Portgual, or even Thailand to take advantage of geoarbitrage and stretch their retirement savings much further.
However, let’s assume you want to remain in your current country and need at least $4,000 per month to retire comfortably. If you want to retire by 2030 then we should increase the minimum amount needed to around $50,000 to adjust for inflation.
Using a standard 5% withdrawal rate, you will need at least $1,000,000 to generate $50,000 per year in retirement income. If you continue spending 5% of your retirement savings then your money will last you 20 years if you earn zero additional income once you stop working.
The good news is that your Tesla shares will appreciate in value over time (assuming the business remains strong) so your money won’t run out for a long time. Investing in Tesla stock is probably the smartest idea at the moment for investors who want to stop working by 2030.
How Many Tesla Shares Do You Need?
If you need at least $1,000,000 over the next 8 years then we first need to calculate a potential Tesla stock price in 2030. TSLA shares have compounded at an impressive 61% CAGR over the last 10 years, which far exceeds the 11% CAGR of the NASDAQ or S&P 500.
Let’s assume Tesla marches towards its ambitious goal of producing 20 million EVs by 2030 and continues growing at a CAGR of 60% annually. That means TSLA stock could trade near $30,000 by 2030 with an astounding $30 trillion market cap.
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If TSLA stock trades for $30,000 per share then you need at least 33 shares to become a millionaire by 2030. TSLA stock current trades at $722 so you would need to invest around $25,000 at current market prices.
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- Annuity.org, “Average Retirement Income: Where Do You Stand?, https://www.annuity.org/retirement/planning/average-retirement-income/