Let me begin first by stating an age old wisdom that it is not enough to live within your means but one has to live BELOW your means in order to generate savings. It is in this spirit that it would be wise to live below that 4% rule in FIRE. This means that you seek to generate 4% from your portfolio yearly but yet consume/spend/withdraw only 2% in order to generate a buffer for future volatility in income or portfolio for that matter.
“Simplicity is the Ultimate Sophistication..
So what will that take?
May 22, 2019 and $1379/month. Straits Times wrote that researchers found that retirees at age 65 will need that amount for a basic standard of living. That works out to be $16548/year. Divide that by 2% and the number $827400 appears. That is just mathematics.
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Can you DIY?
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Why never consider individual securities?
The simple purposes of this write up do not warrant it, but yea sure go ahead if you want to include the other asset classes as well.
Mental freedom is less when incorporating individual securities.
I have yet to find listed individual securities that pay out monthly dividends.
Wrapping Up.
Conservative FIRE is simply planning to live within the 4% generated by the portfolio, and with that it requires a higher capital target at onset. All that to buffer volatility both at income and portfolio level. It’s complicatedly simple.
[…] appeared. Fast forward till today with COVID19, the champions of leveraged yield securities and the FIRE movement have had a good run but now scramble to attribute what has happened. When markets were […]
[…] even the well-heeled control their budgets (even for those who have achieved FIRE), albeit for different intents, purposes and objectives (capital preservation and legacy for […]
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[…] works for money. If man don’t work, money must work. To those who embrace FIRE, do make provisions for some […]
[…] appeared. Fast forward till today with COVID19, the champions of leveraged yield securities and the FIRE movement have had a good run but now scramble to attribute what has happened. When markets were […]
[…] even the well-heeled control their budgets (even for those who have achieved FIRE), albeit for different intents, purposes and objectives (capital preservation and legacy for […]
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