Smart Peeps of Blind, How should one structure their investments to generate enough income to living on for 20 years? Here’s a simple way, please poke holes at it: Say your monthly expenses is $6k and you have $2.5m. Spread the entire amount across high dividend yielding stocks like McDonalds, Target, Exxon Mobile, Coca-Cola, Johnson & Johnson, etc. to generate the $6k (after tax). I can think of a couple of potential issues with this plan: inflation, risk of losing principle during recession, companies can change dividend % anytime. Will inflation be countered by the growth in equity over time? Dividend will still be paid out if the stock takes a dive during recession, right? If company reduces dividend, I can just move the $ to another company. I know people say to diversify and include rental property. But bonds and CDs give very low yield and rental property need maintenance and don’t produce great income after all the taxes and expenses. Thanks in adcance for your thoughts and advice!
Life is short, short the market
For one. You Will have to keep rebalancing the stocks to make sure they still are high yielding both in dividends and their value. This is harder than you think.
r/financialindependence
10 years ago you probably would have had GE on your list...
Keep everything in stocks except 2 years of expenses...in case of recession you can use that...we can’t predict how much time it will take to recover from recession but you have to make some assumption
Add some CEF and REITs to your mix
Balance between growth and dividend stocks
That’s easy mate .. you are looking 10K-11K pret tax .. 0.4% of $2.5M . Plenty of options there
Did you mean 4%? I’m looking for options with less volatility without drawing too much from principle.
Dividend paying whole life insurance. Structured for cash value not death benefit. Your IRR will be 5%+ by year 7, you can live off it easily by year 20. Won’t take your full 2.5m so do whatever else you want with for current living. How do you have 2.5m btw?
60% VTSAX, 25% Total Bond Market, 15% Long term Treasury Index for being inversely correlated.
Thanks but I need income. This seems like a portfolio for someone with a job.
The returns are the income? It seems reasonably defensive.