24 ms·
5% isn't as modest as you think once you take into account inflation and taxes, and the fact that the stock market isn't going to magically go up 10% every year
by paul 17y ago
5% isn't as modest as you think once you take into account inflation and taxes, and the fact that the stock market isn't going to magically go up 10% every year (as many people erroneously assume). Living off of 2% of your assets is a safer and more sustainable assumption.
- mechanical_fish 17y agoTrue. But I, for one, would be perfectly happy with $160k per year. ;)
- HeyLaughingBoy 17y agoNot to mention that if your house is already paid for, you can live on much less than 5%. Housing is far and away most people's biggest expense.
- sadiq 17y agoI did the numbers a few months ago just out of curiosity. If you're buying TIPS (which returned 2% above CPI) and want 50 years of stipend out of your capital, you can get a 3.6% return above inflation. As in, $1m should get you $36k/year for the next 50 years, leaving you with nothing at that point.
- run4yourlives 17y agoSo a buck fifty a year with no mortgage and (I would assume) a really nice house... seems pretty decent to me - :)