2 ms·
This isn't really passive income outside of the 2% dividend yield of a total market index fund, which isn't all that great. A $500,000 investment only yields ab
by pdog 10y ago
This isn't really passive income outside of the 2% dividend yield of a total market index fund, which isn't all that great. A $500,000 investment only yields about $10,000 annually. (Not to mention the significant risk of a market drawdown in a given year.)
- nshelly 10y agoI think the idea is that you can plan on withdrawing 4% every year as well. The more flexible you are with your expenses, the more you can withdraw while ensuring you will have sufficient income throughout your retirement. I like the hybrid constant-percentage / constant-dollar withdrawal method where you keep 7.5 years of withdrawals in bonds and the rest in stocks. So a $1m portfolio produces $40k per year so 7.5x * $40k is $300k in bonds, and $700k in stocks. https://www.bogleheads.org/wiki/Withdrawal_methods#Combination https://www.bogleheads.org/wiki/Withdrawal_methods#Combinati...