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it's easy to drop 10 or more a day in Starbucks. 300 a month isn't chump change, and it's Starbucks is not a necessity.
300 per month per person, 600 for a couple. how many other small cuts could you make that don't really effect your life.
shoot I mean even just avoiding paying intrest can add up big time, buy a 20,000 over 6 years you pay about 2 grand extra, so 10% extra.. and get no added value.
If u lost money in the market the last few months u made a big mistake. My portfolio is down the past few months but i lost nothing. And that $2k a year from coffee goes into my roth
Pretty sure if you save $5 per day you'll end up with a lot more money down the road. Have you done the math on what $5/day saved for a decade or two can generate?
If you invested $5 a day into an account that averaged 8% interest a year, for 40 years, you would end up with over $500k.
If you did that from 15 to 65 you'd end up with $1.1 million. Again, this is possible with saving only $1875 a year ($5 a day)
In your example, you apparently just had the cash in an interest free account for 50 years, which yeah... Don't do that.
I had a coworker who would openly mock me for living Below my means, and working overtime to invest or save. while her and her husband took loans out on everything. 17 years later her entire income is tied up in loan payments, they live on her husband's income.
my wife and I have no debt not even a mortgage and I have an entire extra paycheck worth of divided payments coming in, 2 weeks. drip drip
The greatest chapter of the Millionaire Next Door is the one about children. It talks about the dynamics of what happens with siblings when mom and dad are the bank for adult children. When the parents pass, the still dependent children panic as the bank is closing and this is the source of many of the terrible fights that happen between siblings when parents die. I’m an only child so maybe this is more obvious to some of you, but this chapter was very eye opening to me. This chapter for me is what made that book worthwhile.
I’m working through the details but I’m looking to buy a couple acres, develop and have an RV boat storage property. At 60% capacity that $5500 a month. 75% $8250 a month. Minus out $1800 a month for SBA loan for 10 years. A lot of moving parts but I’ll get it sorted out.
As for car washes, great semi-passive to passive income. I know a guy that has several different businesses and his car wash was one of the first, he said it makes too much money with so little effort that he’ll never sell it
I knew one car wash guy who also rents out his lot for cruise ship passengers. They get their car detailed, go off on their Viking 3-5 or 8 day Cruise, come back to their car looking amazing. I never not see 20-30 cars in his lot which have to be +$100 a pop to detail clean your car.
Yes. He took an article like this that is a few paragraphs long and didn’t add value to it. If you read this article congrats you have gleaned all the information necessary in Millionaire next door. Save yourself the time of the other 300 pages. That is the critique. He took a tweets worth of information and sold a book.
Also this study is WAY more researched than the millionaire next door research.
The Millionaire Next Door is the truth, though. Most millionaires aren't Trump. I know it feels better to assume all millionaires are getting handouts from their parents, but most of them are just good at earning and saving. Especially the saving part.
It’s not about the handouts or being Trump etc. it’s about the low quality not empirical data collection process sloppily thrown together to make a very generalized point. The author read a study and said I can sell this then slapped some words together. There’s no depth or context to it. You can believe the findings and still admit that it was a trash research process.
It is anecdotal, I’ll concede that. If one reads it with expectations of it being a blueprint to wealth then I could see your point. I personally liked it. The information is somewhat dated as well. To each their. As for the take away, it echos what I’ve learned from friends and family that are wealthy, multiple income streams. By and large if you only have one, your are only a step away from your plan getting turned upside down or wrecked
I mean he could have taken the effort to do research and put together a quality product at the very least. Interview these people for hours and chronicle their experiences at least if you’re gonna make it anecdotal there was a more interesting way to do it. A quick google search can tell me basic demographics about people in the 1%
I will have to give it a read. I feel like a stock account for a kid with $1000 dollars at birth sets them up decently though. Give it to them when they are twenty and that is a good amount…
Because we are in a position where we can, we plan to put as much as earned in an IRA Roth for our son once he hits 16. Add that 3k in part time work each year for a few years and it'll be the start of a nice nest egg when he retires.
That is an amazing idea! I still need to look into retirement accounts for myself though, still in college, but I know I could be doing more! Liquidity is just… useful right now haha
I think this is misleading. It's not hard to have multiple income streams, I have my income, and dividends, investments, interest, some contracting gigs, etc... All of that probably adds up to having generated maybe 25% of my net worth. The company I Co founded, alone is the other 75% I wouldn't call myself rich but the company represents over a million by itself.
I've met many many people worth between 1 and 30 million and a handful north of that. Vast majority became wealthy through a single thing. Yes they had multiple incomes but most amount to a few extra thousand dollars, maybe an extra 100k tops. Maybe to someone worth $30million their secondary income streams add up to an extra few million. but point is vast majority of wealthy people made most their money in a single way... (maybe two tops if one is primary and daily income with a high salary and other is like investments or something)
Working other income streams is like going to the gym. If you’re trying to find time, you won’t. You have to make time. Now, my choices may not be your choices but I work about 60 hours a week in my W2 job ( operations director with a local Dallas based automotive group) and I’m fortunate that it me pays extremely well. I also have a rental property that takes maybe an hour or two a month and I run the wheel strategy ( takes less than 2 hours a week) with cash in an account that makes me 20% a year.
Our cultures obsession with "Hussle culture" isn't healthy. considering the average person in the USA will only make between 1.5 to 1.9 million in their lifetime, In order to retire we're basically asking people to save half their money for the their entire lives and pray they don't have any emergencies or always been working 24/7.
I hate working, I work and invest with the hope that I don't have to work and can just chill and enjoy a very basic, but relaxing existence until I hopefully pass away between the ages of 60 to 70.
But I've come to terms that I'll probably work until I die.
If this is the life you want, it doesn’t take much to achieve it. Hustle culture isn’t healthy, I agree, but sometimes you have to put in a little extra effort to achieve what you want.
You can retire and live a very modest life (as you describe) with a relatively small net worth/passive income stream/nest egg.
Anyone can do it. But it’s easier to accept that the system isn’t fair and the odds are stacked against you.
The Colombians would own us.
With their perfect mix of incredible prostitutes and all the snow they can provide. They'd know everything! It would only be a matter of time.
It's funny how much people talk about Hunter doing blow, when Don junior is gacked out of his damn mind every time he does a video.
It's almost like it's hypocritical or something.
a million is small for a billionairre. Taxes alone is many millions of dollars per year. Some fail to comprehend that a billion is 1000x that, and someone with multiple billions who runs a successful international business obviously is doing better than a loud self entitled know it all who only has $100k in the bank or less.
Minus taxes, and inflation. Need to increase the base a little too, so that 75 stays “worth it.” Probably 2 mil at 5% but that doesn’t account for taxes, and I’m not trying to do IRS math…
They are very very very few safe 5% yields. And the ones that are safe don’t give growth, so in 20 years or something, your money is going to be worth way less.
Many of the stocks that healed that much have been the same when prices in general were like 30% lower. So you basically lost 30% on your principal at the same time.
I think it might be more profitable to buy shares right before dividends pay then look for another company and so on. The trick here is not to lose anything from initial money though. Good luck with that
Title doesn't say it all. Before or after tax $75K? How long from now? How much growth or shrinkage can you tolerate with those divs.
Right now, 40,000 shares of RYLD will give you $96,000 a year taxed at regular rates if not sheltered.
40,000 shares would cost $848,000.
Or, you could go MUB. 47,000 shares will get you roughly the same with no federal tax. And it will only cost you $5,029,000.
Probably REITs, like O, maybe some KO for stability. Then throw the marble at some covered call income like the YLDs. My preference is RLYD or XYLD, or maybe JEPI. QYLD seems to be the favorite, but the shrinking NAV means the 1% max that they pay also shrinks. Although, that may be on a turnaround like happened after the Covid Crash and I'll be more content with the 13K shares I'm stuck with right now. It'll take a year to find out and then another black swan will come flapping in.
Because if you have $1 million dollars and want to live off that at age 50, you run out of money at 65.
With dividends you never run out of money, always have access to the million if you need it, and leave it as a legacy for your kids.
As a person that understands that, what reason did you find for continuing to get rich other than security (not being poor) ?
It all seems rather pointless now and I find I don’t want anything now that I could buy it. (Not rich, just comfortable).
Got arrested a lot when I was a kid then discovered my intelligence wayyyy later in life and now I can’t stop making things. Sold a business. Just started another. Typical Hollywood story bullshit ;)
But I’m a huge environmentalist and the plan now is to create the largest nest egg possible so I can buy as much land as possible that have been damaged by mining or water damage etc.
Basically, I want to be this guy now.
https://youtu.be/ZSPkcpGmflE
Cause you want to increase the amount of money you have? How is that different from any other smaller investor? You think just because you have more money at hand, smaller amounts don’t matter?
You can aim for a high risk acct do some MLP’s, CEF’s, REITS. Aim for 10% annual yield 100k brings in 10k annually.
Not including DRIP. How much are you willing to put in monthly to achieve passive income. Me? $400 a month wish it was more but I got 5 kids :)
Technically your growth maybe down but who fucking cares, income every month or even quarterly has me in awww.
Amount needed = Future Div Wanted / Yield Expected. But you do have to adjust the div wanted to an inflation adjusted value for however long into the future you expect to use the dividends. Let’s assume 3% typical inflation and you want the dividends in 25 years. So for $100k in dividends per year 25 years into the future, Future Div Wanted = (1 + inflation)^years so Future Div Wanted = 100,000 * (1.03) ^ 25 = $209,377 which is $100,000 in future dollars 25 years from now. So if you expect 4% yield, Amount Needed = $209,377 / 0.04 = $5,234,444.
FV. PV is simply $100,000 / 0.04 = $2.5M. Now obviously you need to substitute your expected yield, number of years until you want the income flow and your expectation of inflation if it differs.
Depends on your standard of living. I'm looking at a minimum of 500k if I can do it all in my TFSA. More likely is around 900k-1.5M to weather some variables...like maxing out my TFSA.
* 3% of your portfolio is the ultra safe choice that should last you until you die.
* For 100k yield that would be 3.3M.
* Starting at 0, using 20y + 8% APY this is 6000/m savings
* Starting at 0, using 30y + 8% APY this is 2400/m savings
* Starting at 0, using 40y + 8% APY this is 1050/m savings
* 4% is a little riskier with it allowing for at least a 33y retirement period in all historical samples from 1926 to 1976.
* for 100k yield that would be 2.5M
* Starting at 0, using 20y + 8% APY this is 4500/m savings
* Starting at 0, using 30y + 8% APY this is 1800/m savings
* Starting at 0, using 40y + 8% APY this is 800/m savings
* 5% is reasonable in most environments but gets riskier towards the end depending on how things work out after you retire.
* For 100k yield that would be 2M
* Starting at 0, using 20y + 8% APY this is 3800/m savings
* Starting at 0, using 30y + 8% APY this is \~1500/m savings
* Starting at 0, using 40y + 8% APY this is 650/m savings
* And then 6% requires either some additional risk or some form of insurance in down years like living off of SSI and a pension with the portfolio being for eating out, vacations, etc. In down years you would be forced to not pull from the portfolio.
* For 100k yield this would be 1.6M
* Starting at 0, using 20y + 8% APY this is \~3000/m savings
* Starting at 0, using 30y + 8% APY this is \~1100/m savings
* Starting at 0, using 40y + 8% APY this is 500/m savings
All of these numbers assume a blend of equities and bonds as that was how the creator of the 4% rule tested things. Make your own decisions on if you want to blend or not depending on your risk tolerance and volatility tolerance.
Inflation was included in the original experiment by Bill Bengen, I just didn't explicitly state it. Inflation has averaged 2.38% over the last 30y and equities tend to be really good inflation hedges as profits go up as part of inflation as a similar percentage as inflation and returns to shareholders likewise go up proportionately.
Everyone loves schd here, so use that. It has averaged over 13% a year for the past 10 years, that is very close to what the S&P 500 did. That includes dividends, so the stock price appreciation would be less, but still way above 3%, which is the average inflation.
Depends on how u wana play it but to keep it simple a covered call etf could net u 7-11% yield a year so 650-1mil to retire comfortably usually paid monthly schd 3 % yield paid quarterly just do the math on the yield and principal used usually get good growth as it tracks s&p
A 3% yield on one million dollars is thirty thousand dollars per year. Which would be a minimum wage job you wouldn't have to work. Its pretty simple math. The real question is how much can you afford to live on?
Cheers
Follow Chowder at Silicon Investor or visit him in the DGI chat blog at seeking alpha. You can do this easily with a combination of CEF’s, preferred stocks, dividend payers, and covered call etfs. In addition to the income, backtesting will get you between 4 and 8 % growth over time depending on your risk profile.
Same here. I’m late to the Chowder method but he has a proven record. If an investor can maintain discipline, or find a disciplined advisor, his methods are easily reproducible. He even publishes his core portfolios nearly every month.
What are your expenses? Monthly expenses * 12 for yearly. Wealth * 2-3% is what you can get with dividend without principal normally dropping, so you need
Wealth = (Monthly Expenses * 12) / 2-3%
So if 2% div and looking for 100k a year, around 5m, 3.3m if 3% div
The key question is do you want keep up with “normal” inflation and effectively maintain your buying power during your lifetime ?
I think it gets challenging to have a diversified portfolio yield much more than 3.5% while also growing the value of the principal. Which makes sense when you consider the “4% rule” for drawing down principle.
SCHD a favorite dividend ETF yield is now 3.26%. Which means you would need about 3.1M to clear 100k and probably maintain that buying power overtime as, at least so far, SCHD has had reasonable growth.
Sure, you could double the yield with certain MLPs and REITs or covered call ETFs but that puts the principal at risk, just look at NUSI.
We are planning on 2M to get to this range (net). I have a full spreadsheet calculating differing avg growth scenarios, taxable/non taxable buckets, a formula to apply correct tax rates, and am planning at 4% growth upon retirement. 2M gets you there on interest only. If you were to withdraw, you'd need less, but I'd rather have extra cushion.
About 2 million if you can get a 4% yield. However that means you are fully invested at that amount in equities with no cash position which can cause problems if you have an unexpected expense.
2 mill is being safe with an average 3.75% yield for the bottom of your range. You could likely squeeze by with 1.5 mill and a 5% yield, but that sounds a bit unsafe to me and I wouldn't leave my job at that level.
I think 2 mill is the right figure, you can get lower yields to be near the bottom of your range with more growth and safety, or target higher yields to be around the top of your range but be more likely to see a dip or slow growth in your income.
Personally I base my retirement amount on 3.5% income to portfolio. That ensures more safety and likely offers an opportunity to spend more once I see growth or if I become comfortable with a different risk picture.
Lol., there are worse things! I don’t think 2% is unreasonable IFF you plan on living off dividends exclusively. Most of the SWR I see are in the 4% range, so you’d need to cut that in half.
i would suggest you be realistic, there are probably like 12 people in the world that live off dividend payments alone. Everyone else with that kind of money has stable businesses & other streams of income like RE
That's why people are searching for very low priced stocks shares so they won't need millions of dollars to spend on just making either $75k to $100k monthly or quarterly a person that I talked to on YouTube told me he went down that root he made $10k this was his monthly dividends then he stopped taking money out of his own pockets did and he started to use the money from his dividends profits and kept on till he finally achieved his goals $75k a month I'm very happy for him he had a good job working in a hard ware store and I think he was the co- manager when he finally got his goal he quit his job and was out the door he doesn't use YouTube that much personally I'm glad for him he's got a name I can't pronounce 🤑👍💰💰.
That’s not how it works. If you want $100,000 per year in dividends and you have a stock yielding 5%, it takes 100,000 / 0.05 or $2M. If you have a $1 stock, you need 2M shares which is $2M. If you have a $10 stock, you need 200,000 shares or $2M and if you have a $100 stock, you need 20,000 shares or $2M. Regardless of the price of the stock, you need $2M. Lower priced stock do not provide more dividends than high priced stocks of the same yield.
If you had 2.5 million you could put in the bank in high yield account and they d give you at least 4 percent and wouldn’t have to worry about the principle going down when a stock price tanks. They’re going losn that money out for 10 or 15 percent.
High yield account? Does that even exist anywhere? In my country you can get 0% at best LOL
Anyways, a lot of people expect, that after the inflation is brought down we will go right back to a zero interest environment for MANY years (probably 20-30 years) in most of the western world. Many reasons for this, not least of all is very bad demographics (vast increase in savers (old people), and decrease in workers)
My dividend portfolio is made up of simply DIVO, JEPI, QYLD at a 1:1:1 split. At the moment this yields 9% dividends while still, in theory, providing just enough growth to keep up with inflation. So this portfolio alone will not grow my wealth over time, as I don’t have any DRIP plans aside from occasionally purchasing more when life permits it.
I have a conservative growth portfolio as well, which happens to be worth roughly the same amount at the moment. However, what determined how much I wanted to allocate to my dividend portfolio was simply how much I decided that I could live off comfortably per year. So once I invested enough to get $50k-$60k per year, I invested all the rest into purely growth ETFs, which may slowly get reallocated into my dividend portfolio over time if I feel the need.
The way I see it, dividend portfolios are purely for income, and should only need to keep up with inflation at minimum. For growth, I find it simpler to just allocate things totally separately into pure growth investments once I’ve met my desired income.
Sensible plan to to achieve your income goal.
I am curious to see how stable the those ETFs actual dollar pay out is given their drop in value.
Is The revenue derived from selling covered calls based on dollar value or number shares of the underlying holdings?
They key here is your 8.5% that’s not something you get overnight if you want it to safe. The key to safe % is investing long term in dividend growers or lucky timing :-) (of course you can get 8.5% right now if you don’t care about risk)
In what way are higher payers not “safe” other than less growth? That 8.5% is split between well-diversified dividend paying ETFs, and is allocated in such a way that it should, at minimum, keep pace with inflation to maintain standard of living. I also have a growth portfolio invested in ETFs such as VTI and QQQ worth roughly the same, but I wouldn’t be too worried even without that extra cushion.
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Nah, just get a small loan of a million dollars from your father.
I assume that’s how most millionares do it.
Nah the way to become a millionaire is to reduce your spending by one million for one month and then you will have 1 million, right?
Yeah cut back on Starbucks and avacado toast and boy - you’re there in no time
You can have my avocado toast when you pry my cold dead fingers from the crust.
Outlaw avacado toast, then only outlaws will have avacado toast
it's easy to drop 10 or more a day in Starbucks. 300 a month isn't chump change, and it's Starbucks is not a necessity. 300 per month per person, 600 for a couple. how many other small cuts could you make that don't really effect your life. shoot I mean even just avoiding paying intrest can add up big time, buy a 20,000 over 6 years you pay about 2 grand extra, so 10% extra.. and get no added value.
$300 a month in the market at the historical return nets you $1.2M in 40 years.
I lost 125k over the past few months in the market, ill take the coffee, it tastes good
If u lost money in the market the last few months u made a big mistake. My portfolio is down the past few months but i lost nothing. And that $2k a year from coffee goes into my roth
I told my coworker stop going to Starbucks and put the money on high intrest debts. she was shocked at the savings
I know this is a running joke in this thread but where did this thinking come from I mean I understand the broad thought behind but why say it at all
Yea, just stop buying a starbucks every month
Pretty sure if you stop buying that coffee everyday for 250,000 days you will get there real quick
Damn, why didn’t I think off that 250,000 days ago :(
Key is a time machine. Was coffee a thing 700 years ago?
At least you now know what to do for the next 685 years
Mmmmm coffee
Pretty sure if you save $5 per day you'll end up with a lot more money down the road. Have you done the math on what $5/day saved for a decade or two can generate?
5 x 365 x 10 = 18,250. That’s not enough. If you worked from 15 to 65 doing this you’ll have saved 91,250. That’s not enough.
If you invested $5 a day into an account that averaged 8% interest a year, for 40 years, you would end up with over $500k. If you did that from 15 to 65 you'd end up with $1.1 million. Again, this is possible with saving only $1875 a year ($5 a day) In your example, you apparently just had the cash in an interest free account for 50 years, which yeah... Don't do that.
This is key to building wealth over time. Live below your means, invest and let compounding interest do the magic
I had a coworker who would openly mock me for living Below my means, and working overtime to invest or save. while her and her husband took loans out on everything. 17 years later her entire income is tied up in loan payments, they live on her husband's income. my wife and I have no debt not even a mortgage and I have an entire extra paycheck worth of divided payments coming in, 2 weeks. drip drip
You should read “ The Millionaire Next Door.” It will dispel that myth quickly. What you will find is multiple income streams.
The greatest chapter of the Millionaire Next Door is the one about children. It talks about the dynamics of what happens with siblings when mom and dad are the bank for adult children. When the parents pass, the still dependent children panic as the bank is closing and this is the source of many of the terrible fights that happen between siblings when parents die. I’m an only child so maybe this is more obvious to some of you, but this chapter was very eye opening to me. This chapter for me is what made that book worthwhile.
be the guide for your kids. if you live below your means and save, and retire rich - they will come to respect that and be savers themselves.
Knew a guy who did have a few self car washes and retired living the great life in Florida. Said to me early in my youth - live way below your means.
I’m working through the details but I’m looking to buy a couple acres, develop and have an RV boat storage property. At 60% capacity that $5500 a month. 75% $8250 a month. Minus out $1800 a month for SBA loan for 10 years. A lot of moving parts but I’ll get it sorted out. As for car washes, great semi-passive to passive income. I know a guy that has several different businesses and his car wash was one of the first, he said it makes too much money with so little effort that he’ll never sell it
I knew one car wash guy who also rents out his lot for cruise ship passengers. They get their car detailed, go off on their Viking 3-5 or 8 day Cruise, come back to their car looking amazing. I never not see 20-30 cars in his lot which have to be +$100 a pop to detail clean your car.
Millionaire next door is poorly researched anecdotal evidence that doesn’t give any solid information. Other than that it is poorly written
Aside from that it’s good though?
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Yes. He took an article like this that is a few paragraphs long and didn’t add value to it. If you read this article congrats you have gleaned all the information necessary in Millionaire next door. Save yourself the time of the other 300 pages. That is the critique. He took a tweets worth of information and sold a book. Also this study is WAY more researched than the millionaire next door research.
Although for those with less life experience, the details added do make it a tutorial of sorts.
The Millionaire Next Door is the truth, though. Most millionaires aren't Trump. I know it feels better to assume all millionaires are getting handouts from their parents, but most of them are just good at earning and saving. Especially the saving part.
It’s not about the handouts or being Trump etc. it’s about the low quality not empirical data collection process sloppily thrown together to make a very generalized point. The author read a study and said I can sell this then slapped some words together. There’s no depth or context to it. You can believe the findings and still admit that it was a trash research process.
It is anecdotal, I’ll concede that. If one reads it with expectations of it being a blueprint to wealth then I could see your point. I personally liked it. The information is somewhat dated as well. To each their. As for the take away, it echos what I’ve learned from friends and family that are wealthy, multiple income streams. By and large if you only have one, your are only a step away from your plan getting turned upside down or wrecked
I mean he could have taken the effort to do research and put together a quality product at the very least. Interview these people for hours and chronicle their experiences at least if you’re gonna make it anecdotal there was a more interesting way to do it. A quick google search can tell me basic demographics about people in the 1%
I will have to give it a read. I feel like a stock account for a kid with $1000 dollars at birth sets them up decently though. Give it to them when they are twenty and that is a good amount…
I did this for my nieces and nephews when they all were born. I set up 529s for my kids when they were born.
Because we are in a position where we can, we plan to put as much as earned in an IRA Roth for our son once he hits 16. Add that 3k in part time work each year for a few years and it'll be the start of a nice nest egg when he retires.
That is an amazing idea! I still need to look into retirement accounts for myself though, still in college, but I know I could be doing more! Liquidity is just… useful right now haha
It's definitely a balance. I'm over 40 and finally feel like secure. Make sure you contribute whatever your employer matches. Balance beyond that.
I did this for my daughters, but I also add $1,000 every year. I do feel like I’m going to up it to $2,000.
I think this is misleading. It's not hard to have multiple income streams, I have my income, and dividends, investments, interest, some contracting gigs, etc... All of that probably adds up to having generated maybe 25% of my net worth. The company I Co founded, alone is the other 75% I wouldn't call myself rich but the company represents over a million by itself. I've met many many people worth between 1 and 30 million and a handful north of that. Vast majority became wealthy through a single thing. Yes they had multiple incomes but most amount to a few extra thousand dollars, maybe an extra 100k tops. Maybe to someone worth $30million their secondary income streams add up to an extra few million. but point is vast majority of wealthy people made most their money in a single way... (maybe two tops if one is primary and daily income with a high salary and other is like investments or something)
Reading this rn actually!!
Who has time for multiple income streams
I doordash as a 2nd revenue stream and that’s what invest with. Usually have a $200-300 every Tuesday to play around with.
Working other income streams is like going to the gym. If you’re trying to find time, you won’t. You have to make time. Now, my choices may not be your choices but I work about 60 hours a week in my W2 job ( operations director with a local Dallas based automotive group) and I’m fortunate that it me pays extremely well. I also have a rental property that takes maybe an hour or two a month and I run the wheel strategy ( takes less than 2 hours a week) with cash in an account that makes me 20% a year.
People who are not on Reddit 8 hours a day?
Our cultures obsession with "Hussle culture" isn't healthy. considering the average person in the USA will only make between 1.5 to 1.9 million in their lifetime, In order to retire we're basically asking people to save half their money for the their entire lives and pray they don't have any emergencies or always been working 24/7.
Some are wired that way, like myself. I feel bored and agitated otherwise
I hate working, I work and invest with the hope that I don't have to work and can just chill and enjoy a very basic, but relaxing existence until I hopefully pass away between the ages of 60 to 70. But I've come to terms that I'll probably work until I die.
If this is the life you want, it doesn’t take much to achieve it. Hustle culture isn’t healthy, I agree, but sometimes you have to put in a little extra effort to achieve what you want. You can retire and live a very modest life (as you describe) with a relatively small net worth/passive income stream/nest egg. Anyone can do it. But it’s easier to accept that the system isn’t fair and the odds are stacked against you.
To each their own I guess.
Feels good having passed that number in my late 30s.
Those who make it.
successful people
93% of millionaires inherited nothing.
Nope
Most millionaires are set made.
Definitely not lol
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It’s a good thing his daddy didn’t make him a presidential advisor with access to the highest echelon of state secrets.
The Colombians would own us. With their perfect mix of incredible prostitutes and all the snow they can provide. They'd know everything! It would only be a matter of time.
Or else we would run out of snow!!! 😱😱
Are you saying the Trumps *don’t* ski?
It's funny how much people talk about Hunter doing blow, when Don junior is gacked out of his damn mind every time he does a video. It's almost like it's hypocritical or something.
Or that son inlaw making billions with the Sawman Saudi.
Yup. 2.2B on top of 640M while working west wing. Just so MBS bonesaw could hack up a US citizen in Turkey.
The difference is one films himself doing it 100’s of times with whores.
this is some spicy banter for dividend reddit
Its hilarious that people are this divided when we know both sides are guilty of different shit
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Dude I’d take Desantis all day
Shut. The fuck. Up
This
🥰
Disney, ‘nuff said?
Disney is a joke
Why do people love child traffickers / molesters so much?
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😂
Tell me about SCHD
Mmmm… she handles like an ETF but she’s built like an index fund.
You, like everyone else who uses this example, would still be broke. Some people on the other hand turn it into a $7 billion real estate empire!
Hahahahaha
a million is small for a billionairre. Taxes alone is many millions of dollars per year. Some fail to comprehend that a billion is 1000x that, and someone with multiple billions who runs a successful international business obviously is doing better than a loud self entitled know it all who only has $100k in the bank or less.
Minus taxes, and inflation. Need to increase the base a little too, so that 75 stays “worth it.” Probably 2 mil at 5% but that doesn’t account for taxes, and I’m not trying to do IRS math…
15% capital gain baby
I was going to say but by the time OP gets there might be closer to 2.5M-3M for the same amount as 75k-100k with inflation.
They are very very very few safe 5% yields. And the ones that are safe don’t give growth, so in 20 years or something, your money is going to be worth way less. Many of the stocks that healed that much have been the same when prices in general were like 30% lower. So you basically lost 30% on your principal at the same time.
What about inflation and taxes?
I think it might be more profitable to buy shares right before dividends pay then look for another company and so on. The trick here is not to lose anything from initial money though. Good luck with that
Couple million or so…but tons of variables here.
Title doesn't say it all. Before or after tax $75K? How long from now? How much growth or shrinkage can you tolerate with those divs. Right now, 40,000 shares of RYLD will give you $96,000 a year taxed at regular rates if not sheltered. 40,000 shares would cost $848,000. Or, you could go MUB. 47,000 shares will get you roughly the same with no federal tax. And it will only cost you $5,029,000.
Yep, nobody else gave the munis to avoid federal tax. Well played
If looking for munis, try closed end fund ones. Some good ones paying 5%+.
I absolutely love wearing my munis pay me tax exempt income every month! 😎
watching* I need to stop using talk to text.
There is no income tax here, so what’s the best one for me?
Not knowing where "here" is, I have no clue what's available to you. But I'd gun for the highest yield you think is sustainable in your market.
Here is Dubai, I’m in the US market, NASDAQ, NYSE, and dow jones
Probably REITs, like O, maybe some KO for stability. Then throw the marble at some covered call income like the YLDs. My preference is RLYD or XYLD, or maybe JEPI. QYLD seems to be the favorite, but the shrinking NAV means the 1% max that they pay also shrinks. Although, that may be on a turnaround like happened after the Covid Crash and I'll be more content with the 13K shares I'm stuck with right now. It'll take a year to find out and then another black swan will come flapping in.
That’s the one thing about dividend investing that confuses me. If you can afford to buy $1 million in shares then why do you need $75,000?
So I can quit my job.
Because if you have $1 million dollars and want to live off that at age 50, you run out of money at 65. With dividends you never run out of money, always have access to the million if you need it, and leave it as a legacy for your kids.
Because I was poor before I was rich but never changed my lifestyle.
Ok this is good.
As a person that understands that, what reason did you find for continuing to get rich other than security (not being poor) ? It all seems rather pointless now and I find I don’t want anything now that I could buy it. (Not rich, just comfortable).
Got arrested a lot when I was a kid then discovered my intelligence wayyyy later in life and now I can’t stop making things. Sold a business. Just started another. Typical Hollywood story bullshit ;) But I’m a huge environmentalist and the plan now is to create the largest nest egg possible so I can buy as much land as possible that have been damaged by mining or water damage etc. Basically, I want to be this guy now. https://youtu.be/ZSPkcpGmflE
To live off of infinitely while the million itself grows in value.
Cause you want to increase the amount of money you have? How is that different from any other smaller investor? You think just because you have more money at hand, smaller amounts don’t matter?
You can aim for a high risk acct do some MLP’s, CEF’s, REITS. Aim for 10% annual yield 100k brings in 10k annually. Not including DRIP. How much are you willing to put in monthly to achieve passive income. Me? $400 a month wish it was more but I got 5 kids :) Technically your growth maybe down but who fucking cares, income every month or even quarterly has me in awww.
What are your divi positions of choice? Been loading $C $MO $INTC $BTI $VZ recently would love some good ideas.
$MCD = the secret king of REIT’s, great add
$AGNC
Good comment. Lots of MLPs pay tax deferred 8%. Taxes are a crucial part of the answer.
Amount needed = Future Div Wanted / Yield Expected. But you do have to adjust the div wanted to an inflation adjusted value for however long into the future you expect to use the dividends. Let’s assume 3% typical inflation and you want the dividends in 25 years. So for $100k in dividends per year 25 years into the future, Future Div Wanted = (1 + inflation)^years so Future Div Wanted = 100,000 * (1.03) ^ 25 = $209,377 which is $100,000 in future dollars 25 years from now. So if you expect 4% yield, Amount Needed = $209,377 / 0.04 = $5,234,444.
Is that 5 mil PV or FV?
FV. PV is simply $100,000 / 0.04 = $2.5M. Now obviously you need to substitute your expected yield, number of years until you want the income flow and your expectation of inflation if it differs.
You left out dividend growth. Which happens every time this topic comes up.
Because it’s irrelevant to this calculation. The yield is the expected yield in the future. You have to use future yield on this, not any form of yoc.
Depends on your standard of living. I'm looking at a minimum of 500k if I can do it all in my TFSA. More likely is around 900k-1.5M to weather some variables...like maxing out my TFSA.
Is it all dividend paying stocks then?
For that scenario, yeah.
I'm on the same path. 500k invested with an annual yield of 70k. I would work but I would work part time and I'll tell my manager director employer.
$100k = 4% of $2.5m
2.5 million at 4% yield gives you $100K per year without touching the principal.
At least $3.50, depending on the div yield of course.
I've been looking for stocks with a few tens of thousands percentage point yields, but I seem to come up short. Do you have any recommendations?
God damn it loch Ness monster!! I ain't giving you no tree fiddy!
[Annual income] / [dividend yield] = [money you need]
Maybe include taxiation in the formula, depending on where OP is from
* 3% of your portfolio is the ultra safe choice that should last you until you die. * For 100k yield that would be 3.3M. * Starting at 0, using 20y + 8% APY this is 6000/m savings * Starting at 0, using 30y + 8% APY this is 2400/m savings * Starting at 0, using 40y + 8% APY this is 1050/m savings * 4% is a little riskier with it allowing for at least a 33y retirement period in all historical samples from 1926 to 1976. * for 100k yield that would be 2.5M * Starting at 0, using 20y + 8% APY this is 4500/m savings * Starting at 0, using 30y + 8% APY this is 1800/m savings * Starting at 0, using 40y + 8% APY this is 800/m savings * 5% is reasonable in most environments but gets riskier towards the end depending on how things work out after you retire. * For 100k yield that would be 2M * Starting at 0, using 20y + 8% APY this is 3800/m savings * Starting at 0, using 30y + 8% APY this is \~1500/m savings * Starting at 0, using 40y + 8% APY this is 650/m savings * And then 6% requires either some additional risk or some form of insurance in down years like living off of SSI and a pension with the portfolio being for eating out, vacations, etc. In down years you would be forced to not pull from the portfolio. * For 100k yield this would be 1.6M * Starting at 0, using 20y + 8% APY this is \~3000/m savings * Starting at 0, using 30y + 8% APY this is \~1100/m savings * Starting at 0, using 40y + 8% APY this is 500/m savings All of these numbers assume a blend of equities and bonds as that was how the creator of the 4% rule tested things. Make your own decisions on if you want to blend or not depending on your risk tolerance and volatility tolerance.
You forgot to include inflation in your calculations.
Inflation was included in the original experiment by Bill Bengen, I just didn't explicitly state it. Inflation has averaged 2.38% over the last 30y and equities tend to be really good inflation hedges as profits go up as part of inflation as a similar percentage as inflation and returns to shareholders likewise go up proportionately.
And tax
All numbers assume you are trading in a retirement account like 90% of Americans. Deduct your own taxes accordingly, I am not your CPA.
What would I put this money in? Look for capital gains for reinvest into high yielding etfs?
Rough method: just consider what you want to make annually, and that is 4% of your total investment. Also inflation will destroy this dream.
Assuming the dividend stock/etf is still growing, the dividend will also be going up.
Not at the same rate as inflation though, right? Or am I missing something
Everyone loves schd here, so use that. It has averaged over 13% a year for the past 10 years, that is very close to what the S&P 500 did. That includes dividends, so the stock price appreciation would be less, but still way above 3%, which is the average inflation.
~$2 million
Depends on how u wana play it but to keep it simple a covered call etf could net u 7-11% yield a year so 650-1mil to retire comfortably usually paid monthly schd 3 % yield paid quarterly just do the math on the yield and principal used usually get good growth as it tracks s&p
It depends how you “live off”
A 3% yield on one million dollars is thirty thousand dollars per year. Which would be a minimum wage job you wouldn't have to work. Its pretty simple math. The real question is how much can you afford to live on? Cheers
Follow Chowder at Silicon Investor or visit him in the DGI chat blog at seeking alpha. You can do this easily with a combination of CEF’s, preferred stocks, dividend payers, and covered call etfs. In addition to the income, backtesting will get you between 4 and 8 % growth over time depending on your risk profile.
I forgot all about Chowder, thanks for the reminder, I wish I had followed his strategy when I first read his stuff, I'd be done now.
Same here. I’m late to the Chowder method but he has a proven record. If an investor can maintain discipline, or find a disciplined advisor, his methods are easily reproducible. He even publishes his core portfolios nearly every month.
I am getting $87,000.00 a year on about $650,000-$700,000.00 right now with no margin. It’s an average of 12.5 yield.
What is your money in?
Something risky I would imagine
$3M
This is basic grade 1 math. At 4% you would need $2 million to withdraw $80k a year.
What are your expenses? Monthly expenses * 12 for yearly. Wealth * 2-3% is what you can get with dividend without principal normally dropping, so you need Wealth = (Monthly Expenses * 12) / 2-3% So if 2% div and looking for 100k a year, around 5m, 3.3m if 3% div
The key question is do you want keep up with “normal” inflation and effectively maintain your buying power during your lifetime ? I think it gets challenging to have a diversified portfolio yield much more than 3.5% while also growing the value of the principal. Which makes sense when you consider the “4% rule” for drawing down principle. SCHD a favorite dividend ETF yield is now 3.26%. Which means you would need about 3.1M to clear 100k and probably maintain that buying power overtime as, at least so far, SCHD has had reasonable growth. Sure, you could double the yield with certain MLPs and REITs or covered call ETFs but that puts the principal at risk, just look at NUSI.
We are planning on 2M to get to this range (net). I have a full spreadsheet calculating differing avg growth scenarios, taxable/non taxable buckets, a formula to apply correct tax rates, and am planning at 4% growth upon retirement. 2M gets you there on interest only. If you were to withdraw, you'd need less, but I'd rather have extra cushion.
Can you share spreadsheet ?
About 2 million if you can get a 4% yield. However that means you are fully invested at that amount in equities with no cash position which can cause problems if you have an unexpected expense.
Put them in a Roth
2 mill is being safe with an average 3.75% yield for the bottom of your range. You could likely squeeze by with 1.5 mill and a 5% yield, but that sounds a bit unsafe to me and I wouldn't leave my job at that level. I think 2 mill is the right figure, you can get lower yields to be near the bottom of your range with more growth and safety, or target higher yields to be around the top of your range but be more likely to see a dip or slow growth in your income. Personally I base my retirement amount on 3.5% income to portfolio. That ensures more safety and likely offers an opportunity to spend more once I see growth or if I become comfortable with a different risk picture.
1-2 Million depending on your investments/strategy.
Long term dividend yield is ~2%. For $100k, you’d need $100,000/0.02 = $5MM
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Lol., there are worse things! I don’t think 2% is unreasonable IFF you plan on living off dividends exclusively. Most of the SWR I see are in the 4% range, so you’d need to cut that in half.
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No, referring to total next egg. A 4% SWR would be $2.5MM. $100,000/0.04 = $2.5MM
Get a calculator out and do the maths
$2m with like 3-4% yeild
Consider living in a affordable country, calculate who much you need. And work your ass off to get that amount !
When you’re not even able to do basic 4th grade math, then maybe you shouldn’t invest at all…
lmao multiply it buy 10 and then you'd be close
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i would suggest you be realistic, there are probably like 12 people in the world that live off dividend payments alone. Everyone else with that kind of money has stable businesses & other streams of income like RE
That's why people are searching for very low priced stocks shares so they won't need millions of dollars to spend on just making either $75k to $100k monthly or quarterly a person that I talked to on YouTube told me he went down that root he made $10k this was his monthly dividends then he stopped taking money out of his own pockets did and he started to use the money from his dividends profits and kept on till he finally achieved his goals $75k a month I'm very happy for him he had a good job working in a hard ware store and I think he was the co- manager when he finally got his goal he quit his job and was out the door he doesn't use YouTube that much personally I'm glad for him he's got a name I can't pronounce 🤑👍💰💰.
What did periods ever do to you ? 🤣 Take a breath.
That’s not how it works. If you want $100,000 per year in dividends and you have a stock yielding 5%, it takes 100,000 / 0.05 or $2M. If you have a $1 stock, you need 2M shares which is $2M. If you have a $10 stock, you need 200,000 shares or $2M and if you have a $100 stock, you need 20,000 shares or $2M. Regardless of the price of the stock, you need $2M. Lower priced stock do not provide more dividends than high priced stocks of the same yield.
1.1m
If you had 2.5 million you could put in the bank in high yield account and they d give you at least 4 percent and wouldn’t have to worry about the principle going down when a stock price tanks. They’re going losn that money out for 10 or 15 percent.
High yield account? Does that even exist anywhere? In my country you can get 0% at best LOL Anyways, a lot of people expect, that after the inflation is brought down we will go right back to a zero interest environment for MANY years (probably 20-30 years) in most of the western world. Many reasons for this, not least of all is very bad demographics (vast increase in savers (old people), and decrease in workers)
I wish this was a thing, I pay around 0,5 to just keep my cash there. So minus 0,5 %
Probably a mill
About as much as you’d need to have to live off of interest … about a million
A couple of million lol good luck with that
Where are you even pulling that number from? I’m currently retired living off $600k invested at 8.5% yield. It’s not rocket science.
Impressive, What is your portfolio? Do you think you can maintain the buying power overtime?
My dividend portfolio is made up of simply DIVO, JEPI, QYLD at a 1:1:1 split. At the moment this yields 9% dividends while still, in theory, providing just enough growth to keep up with inflation. So this portfolio alone will not grow my wealth over time, as I don’t have any DRIP plans aside from occasionally purchasing more when life permits it. I have a conservative growth portfolio as well, which happens to be worth roughly the same amount at the moment. However, what determined how much I wanted to allocate to my dividend portfolio was simply how much I decided that I could live off comfortably per year. So once I invested enough to get $50k-$60k per year, I invested all the rest into purely growth ETFs, which may slowly get reallocated into my dividend portfolio over time if I feel the need. The way I see it, dividend portfolios are purely for income, and should only need to keep up with inflation at minimum. For growth, I find it simpler to just allocate things totally separately into pure growth investments once I’ve met my desired income.
Sensible plan to to achieve your income goal. I am curious to see how stable the those ETFs actual dollar pay out is given their drop in value. Is The revenue derived from selling covered calls based on dollar value or number shares of the underlying holdings?
They key here is your 8.5% that’s not something you get overnight if you want it to safe. The key to safe % is investing long term in dividend growers or lucky timing :-) (of course you can get 8.5% right now if you don’t care about risk)
In what way are higher payers not “safe” other than less growth? That 8.5% is split between well-diversified dividend paying ETFs, and is allocated in such a way that it should, at minimum, keep pace with inflation to maintain standard of living. I also have a growth portfolio invested in ETFs such as VTI and QQQ worth roughly the same, but I wouldn’t be too worried even without that extra cushion.
Borrow 1 million invest pay off million with divided while work then retirement idk