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- 100.000 EUR invested in indexfunds should net me on average around 6% a year after taxes, i.e. 6000 EUR a year or 500 EUR a month (7% historic average minus ~

- 100.000 EUR invested in indexfunds should net me on average around 6% a year after taxes, i.e. 6000 EUR a year or 500 EUR a month (7% historic average minus ~1% tax). - With no monthly rent to pay, I'm should be able to live a bit more comfortably compared to my Russian co-workers here :) How are you going to pay the rent when the market inevitably doesn't return?

onion2k 11y ago
And what are you going to live on in 20 years time when inflation has halved the value of the 100.000 EURs?
- wsc981 11y ago
  The historic numbers I mentioned with regards to profit from investments take into account historic inflation numbers. The numbers are based on the Dutch book 'De Schitterende Eenvoud van Indexbeleggen'[0]. Inflation should not be an issue. Still the bigger plan is to make extra money by working full-time on my own projects. So the goal is to increase investments every year and also the profit from investments. @onion2k: The book isn't saying you can live forever for that amount. It's a calculation I made for myself based on the historic average profits of the stock market in the long term (based on ~100 years of data). I'm living for 2 months in Thailand and I can have a basic living here for 500 EUR a month, especially if I have a fully paid for apartment. That's a basic living without much luxury, but a good starting point to full-time commit myself to my own projects. And hopefully build more income that way. I also don't have wife, kids, etc… --- [0]: http://www.bol.com/nl/p/de-schitterende-eenvoud-van-indexbeleggen/1001004006191081/ http://www.bol.com/nl/p/de-schitterende-eenvoud-van-indexbel...
  - onion2k 11y ago
    I don't read Dutch, but I can assure you that if it's saying you can invest 100.000 EUR and live off the interest forever without reinvesting it then it is wrong.
    - jonknee 11y ago
      Well it depends entirely on how much you need to live, how long you're going to live and what kind of dividends you're receiving.
  - wsc981 11y ago
    English article about the 7% stock market returns average: http://money.usnews.com/money/personal-finance/mutual-funds/articles/2012/08/08/is-the-7-percent-return-for-stocks-extinct http://money.usnews.com/money/personal-finance/mutual-funds/...
    - knughit 11y ago
      Since economics shows that if everyone believes in 7% return , and capital is so efficient to move as it is now with digital systems, that grown would be already priced in. Hence the absurd 50-100x P/E ratios we see. It is unsustainable.
      - idanoeman 11y ago
        It's only unsustainable if the underlying assets don't allow for 7% return in the long run. It's possible capital is scarce relative to the opportunities for investment such that 7% real returns are the norm. In that case, it doesn't matter if everyone believes in the 7% rate, there will be no crash.

onion2k 11y ago

And what are you going to live on in 20 years time when inflation has halved the value of the 100.000 EURs?

wsc981 11y ago
The historic numbers I mentioned with regards to profit from investments take into account historic inflation numbers. The numbers are based on the Dutch book 'De Schitterende Eenvoud van Indexbeleggen'[0]. Inflation should not be an issue. Still the bigger plan is to make extra money by working full-time on my own projects. So the goal is to increase investments every year and also the profit from investments. @onion2k: The book isn't saying you can live forever for that amount. It's a calculation I made for myself based on the historic average profits of the stock market in the long term (based on ~100 years of data). I'm living for 2 months in Thailand and I can have a basic living here for 500 EUR a month, especially if I have a fully paid for apartment. That's a basic living without much luxury, but a good starting point to full-time commit myself to my own projects. And hopefully build more income that way. I also don't have wife, kids, etc… --- [0]: http://www.bol.com/nl/p/de-schitterende-eenvoud-van-indexbeleggen/1001004006191081/ http://www.bol.com/nl/p/de-schitterende-eenvoud-van-indexbel...
- onion2k 11y ago
  I don't read Dutch, but I can assure you that if it's saying you can invest 100.000 EUR and live off the interest forever without reinvesting it then it is wrong.
  - jonknee 11y ago
    Well it depends entirely on how much you need to live, how long you're going to live and what kind of dividends you're receiving.
- wsc981 11y ago
  English article about the 7% stock market returns average: http://money.usnews.com/money/personal-finance/mutual-funds/articles/2012/08/08/is-the-7-percent-return-for-stocks-extinct http://money.usnews.com/money/personal-finance/mutual-funds/...
  - knughit 11y ago
    Since economics shows that if everyone believes in 7% return , and capital is so efficient to move as it is now with digital systems, that grown would be already priced in. Hence the absurd 50-100x P/E ratios we see. It is unsustainable.
    - idanoeman 11y ago
      It's only unsustainable if the underlying assets don't allow for 7% return in the long run. It's possible capital is scarce relative to the opportunities for investment such that 7% real returns are the norm. In that case, it doesn't matter if everyone believes in the 7% rate, there will be no crash.