4 ms·

Me. Once I own my house my expenses are 30k a year. Even 1.5 mil easily covers that.

stvltvs 3y ago
Until you have a significant health issue that can drastically increase expenses, depending on insurance of course. Even with good coverage, you might be on the hook for bills that your provider denied coverage for.
- ghaff 3y ago
  $30K also sounds pretty low. House taxes/insurance/utilities/etc. aren't free and you need to budget at least something for maintenance. For most people in the US, automobile. Food even if you don't eat out a lot. Certainly there will be healthcare costs--even with Medicare.
  - HDThoreaun 3y ago
    My total home costs are just less than 10k after mortgage principal+interest. I don't have a car. You're both right though my medical costs will definitely increase.
MuffinFlavored 3y ago
How do you plan on setting up the $1.5m? 90% invested, 10% cash? what are the investments going to look like? 100% index funds? What if the market doesn't return 7-10%? What's your plan, draw down 4% a year, 1% a quarter? S&P500 index fund has a 1.5% dividend, so you only need to draw 4 - 1.5 = 2.5% (0.625% a quarter), unless you'd let the dividends reinvest and then sell them off. You can get treasuries/bonds yielding 4-5% for short term now, not sure about a 15-30 year outlook. Annunities and other weird things (high dividend yield ETFs) are an option but anything other than trying to find 4%+ is not without risks. Plus your expenses are $30k now. In 2020, what were they? $25k? They won't be $30k forever (as you know). I just can't imagine being in a position where I need to sell off 1% of my portfolio quarterly to live no matter the conditions of the market. The stock market can perform like crap for years at a time. Your net worth in stocks can drawdown up to 40-50% in 'worst case scenarios'
- HDThoreaun 3y ago
  All I need is 2% plus inflation and taxes. SP500 dividend as you said is already 1.5 so we're pretty close. There are stocks that have div yield of 6+%, there are bonds, SP500 buybacks plus dividends are like 4% so if you sell the buyback amount and keep dividends you're there as long as the businesses grow at least as much as inflation. Of course there are risks but I like my chances.

Until you have a significant health issue that can drastically increase expenses, depending on insurance of course. Even with good coverage, you might be on the hook for bills that your provider denied coverage for.

ghaff 3y ago
$30K also sounds pretty low. House taxes/insurance/utilities/etc. aren't free and you need to budget at least something for maintenance. For most people in the US, automobile. Food even if you don't eat out a lot. Certainly there will be healthcare costs--even with Medicare.
- HDThoreaun 3y ago
  My total home costs are just less than 10k after mortgage principal+interest. I don't have a car. You're both right though my medical costs will definitely increase.

MuffinFlavored 3y ago

How do you plan on setting up the $1.5m? 90% invested, 10% cash? what are the investments going to look like? 100% index funds? What if the market doesn't return 7-10%? What's your plan, draw down 4% a year, 1% a quarter? S&P500 index fund has a 1.5% dividend, so you only need to draw 4 - 1.5 = 2.5% (0.625% a quarter), unless you'd let the dividends reinvest and then sell them off. You can get treasuries/bonds yielding 4-5% for short term now, not sure about a 15-30 year outlook. Annunities and other weird things (high dividend yield ETFs) are an option but anything other than trying to find 4%+ is not without risks. Plus your expenses are $30k now. In 2020, what were they? $25k? They won't be $30k forever (as you know). I just can't imagine being in a position where I need to sell off 1% of my portfolio quarterly to live no matter the conditions of the market. The stock market can perform like crap for years at a time. Your net worth in stocks can drawdown up to 40-50% in 'worst case scenarios'

HDThoreaun 3y ago
All I need is 2% plus inflation and taxes. SP500 dividend as you said is already 1.5 so we're pretty close. There are stocks that have div yield of 6+%, there are bonds, SP500 buybacks plus dividends are like 4% so if you sell the buyback amount and keep dividends you're there as long as the businesses grow at least as much as inflation. Of course there are risks but I like my chances.