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4% draw down on a stock index fund will likely pay 80k anually adjusted for inflation indefinitely.

At least, this is based on historic stock data However, I was taught in undergrad econ, that this 4% return above inflation is considered the risk premium, over what a CD would get you. So there is a real risk of losing everything. Which means hedging is a good idea, some of the money to buy a reasonable house, some %age of rest in bond fund, and quarterly rebalancing can go a long way to preserve a lot of wealth in a black swan event.




Yeah, it's more like 2M will let you live confortable indefinitely in 90% of future scenarios. So there is still an y% chance you might have to go back to work again.


Even if I get to that level of net worth - which, as I noted, I'm not at yet - I'd probably still have some earned income. I could just care much less about how much and could be a lot choosier about what work I want.


But if you had $2 mill to invest you wouldn't have it all in one concentrated index fund - you would have at least 50% in wealth preservation funds and diversified investments commercial property, overseas funds/trusts etc.

I have less that 10% of that in my investment portfolio and don't actually have a FTSE 100 tracker I have around 20 investment trusts and individual shares.


I don't even have of 80k USD in after-tax inflation-adjusted expenses living here. It's a cheap city.




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