/biz/ - Business & Finance

you need to be able to withdraw 3% MAX per year in order to not risk diminishing your capital

im not sure if 3% delivers growth long term, pic related, im retarded so im not sure what this means but i think it means 3% will not eat your capital, the higher you go from 3% you lose capital, also do not buy bonds

but i dont get if this will give you some growth

anyway lets say 3%, so you need like 5 million to live comfy

1 million poorfag mode

2.5% tolerable mode

>>58491540
how do you get the 4%? withdrawing 4% yearly you are at risk of lossing your capital, according to this you need to be 100% sp500 and withdraw less than 4%, ironically bonds will fuck up your capital

high dividends shit just dilute your capital

i dont know how to use money after you reach a "make it" ammount without the anxiety of lossing your principal

i already have near 400k so i want to 3x this shit and finally be able to spend

>>58443937
bonds fuck up your withdraw stategy, its fucking retarded
look at this study
https://earlyretirementnow.com/2016/12/14/the-ultimate-guide-to-safe-withdrawal-rates-part-2-capital-preservation-vs-capital-depletion/

so basically you need 100% on the SP500 and you cannot withdraw more than 3%. im not sure if this still grows your capital or this means it just doesn't consume it and you can at least mantain it

5% you are fucking dreaming

and since these tests are always done on a 100% sp500 portfolio you need to be sure that you can live off that 3% withdraw even if it crashes hard

so basically you need around 3 million minimum to get a decent wage even on a crash

FUCK

>>58398721
so whats the point of buying that vs just normal sp500 and liquidate 3% yearly?
why does that other email buy it?
he's getting 4600$ a month he said here:
>>58394774
and appreciates at almost the same rate at $4600
but they say that to not lose your principal you cannot withdraw more than 3% yearly (pic related) to stay safe, 4% for a bit higher chances of lossing your principal in the long run
so how does this guy get 4600$ a month from 560k and not lose his principal?
i have similar money and i want to know whats the best to live from it, i dont want real state i want something that i can live off while being able to move anywhere i want if i want to.

>>58126485
what yield are you talking about? im already on money market monetary funds which have 1 to 3 months debt and yield is around €STR index (3.6-3.9%) at current rates, again, when rates are lowered it will be less

>>58126509
thats dogshit mate, and it only works if you inherited a house or live with your mom (i live with my mom)

you need 2000€ a month for decent living

>>58126372
this has only been calculated for the sp500 and bonds fuck up the plan, also again, what if the sp500 dumps? you will be getting 3% out of potentially 30% less or more

this why again, you need to be able to live off that 3%, even after a big crash, and for that you need 1 million

>>57697474
Okay here are your options:
100% on the SP500. According to theory, 4% withdraws every year will not deplete the principal. However, this has been recalculated, so 3% is safer. If I understand this chart properly, it should be ok.

The problem: SP500 can be volatile as fuck. So if it crashes 50%, you will be getting a 3% off 500k for a while. You cannot raise the 3% to compensate or you will fuck up the capital even faster

2) BTC, higher returns, but even more volatility

And that's about it. Real state is fucking retarded, it's just an headache, you have your money on some iliquid asset, you cannot easily move as needed.

Dividends, as you can tell, just deplete your initial capital. It feels good to get a payment, but your principal is shrinking. You can just buy an index fund and manage the dividends yourself by paying yourself 3/12 monthly. People pay Charles Schwab extra fees to do this for them I don't know why.

Basically, what I would do is to gamble the 1 million again on a 2x. If you can get 2 million you are good to do. You now can have 1 million in high growth stuff (say, 50% SP500, 50% BTC) and then an extra million where here it doesn't matter that much if you just put it on SCHB, or even JEPI for an higher income and just enjoy life. You of course avoid buying real state like the absolute retards here will tell you to do, so you can have cashflows that allow you to rent anywhere in the world. Also avoid SEAtards or any other thirld world venues. Plenty of cool places in EU.

>>56895474
>safe withdrawal rate of 4%.
From my research, if you mean putting it all on the sp500 and withdrawing 4% a year, it is not really safe, looks like nowadays it is 3%

also, what the fuck do I do if the market crashes like 50%? during that year I would be fucked, and I cannot withdraw more because I would be eating the principal

Wether the dividends are paid or you manually withdraw, at the end of the day the % depends on the price of the shares you are holding, if its a bad year you'll have less money, this is why you need a decent stack so even if it crashes, you will still survive.

And its always nice to see a felow lifehacker. You never managed to replicate the success? It's so fucking difficult isnt it. Im starting a new channel but my got is lava trying to work facing 0 subscribers. I was a the right moment, doing the right thing. Now im just hoping to get to 1k a month, ffs. Fucking sad dude.

>>55687825
Real State is retarded. You don't know your worth until you sell. It's not liquid. You are trapped on the same place.

Having a million on the SP500 allows you to move around and live off liquidating 3% yearly without ever losing your principal. Having a million on real state gives you a potentially cool condo while you are still a waggie, or a shitbox if its an expensive place.

You basically need 2 millions to make it. A million dollar house and a million dollar in investments. Everything else is a scam. If you have to choose, SP500 1 mill is obviously a better position.

What's the point of dividend paying stocks vs just buying an index fund that's solid and liquidating a safe 3%, or 4% if it's a great year?

I mean who the fuck beats the index being an smart stockpicking ass of dividend paying "artistocrat" stocks when the top 10 of SP500 stocks have switched almost every decade?

You are gambling that the stock price doesn't plummet your investment and it may not bounce back to ATH (see IBM, Intel, and all these "solid" stocks that were supposed to never fail).

"Just buy Chevron bro, just buy this just buy that".

You cannot predict these things, that's why I say, why not buy the SP500 and live off that 3-4% withdrawal which should not eat your principal and have margin to keep growing? If it fails just stick to that fucking 3-4%, better times will come.
Nobody on a long enough timeline is going to beat that.

Another option would be to buy a dividend paying index of ETF that's based on the SP500 but from what i've seen they pay like 2%, why not just manage your own dividend and get a 3% withdraw from an index fund.

I just feel like people want to be smartasses with these things when everything is already invented.

Does this mean that if you have like 400k on the MSCI World or the SP500 you can live off that selling 3% a year and never run out of money? (and potentially keep growing your 400k)

Im 33 and I don't need to pay rent since I live with my mom. I have 400k to my name after 5 years of making content online and all of a sudden i've stopped being able to do it. Before that I was a jobless NEET. Could I just live off that? The MSCI World approach is more diversified one possible while not having to deal with nonsense like being a landlord and they stop paying and you cannot kick them out (it works like that in my country), and also dividends are annoying since you have to file up taxes every 3 months vs index funds plus you have no accumulation in case you make gains beyond the 3% you withdraw.

I hope I can make money ever again but I will never have a job, im half autistic and im always tired. I lucked out being at the right moment doing the right thing.

in4 gamble it on exotic dumb shit like shitcoins, just write options bro etc.

>>55333876
Forgot to add pic related

What's the point of owning bonds?

I believe John Bogle was right and long term DCA into index funds is the only save investment long term, but bogleheads always add a % of bonds on their portfolios. What's the idea? I saw this study, and the higher % of stocks you own, the less chance to run out of money if you liquidate the %'s seen there. So if you were to have 100% in stocks, you could liquidate 3% yearly and not run out of money in 60 years. So basically have 1 million in MSCI World (or SP500, not sure what these stacks are when it says "100% stocks", but MSCI World sounds safer than 100% USA) and then basically you never run out of money if you liquidate 3% yearly.

So what's the point of adding bonds then if they just increase the chances to run out of money? Why not 100% MSCI World and be done with it? Why do I even need Emerging Markets or Small Caps for btw?

Im just considering buying this index fund going all in there: Vanguard Global Stock Index Fund EUR Acc - IE00B03HD191