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My point on the topic is that we as people are taught via society that no amt is enough. The reason is that society teaches us to want that next new product (the iphone, that next BMW, 10 acre mansion ect). Some of us are fortunate to have self imposed limits thereby we can state what would be though of as enough. I would think I would be happy with twelve million. Half million donation to church and half to charities, two million to enjoy, set up trust for the kids with three million, and six million to set up a funds to create a residual cash cow for the future.
I think probably anyone can retire and live very comfortably on 1 million dollars. You just need a little financial wisdom and you can net 10k/month off of that fo' life!
This is my thinking...This got me thinking.
Ten thousand dollars a month would be $120,000 per year which would be in the top 10% as far as income is concerned. From a one million dollar investment, that would require a 12% return. Possible, but challenging to accomplish for most.
http://www.financialsamurai.com/2011/04/12/how-much-money-do-the-top-income-earners-make-percent/
Which led me to think about other combinations of investment and return required to generate $120,000:
$ 2,000,000 X 6.0% = $120,000
$ 3,000,000 X 4.0% = $120,000
$ 5,000,000 X 2.4% = $120,000
$10,000,000 X 1.2% = $120,000
Income of four percent should be relatively easy to accomplish with municipal bonds, utility stocks and such. So, that would mean anything above 3 million would put you in the top 10% of income earners without ever touching your principal.
$ 3,000,000 X 4.0% = $120,000
$ 5,000,000 X 4.0% = $200,000
$10,000,000 X 4.0% = $400,000
Before tax and not considering inflation, of course.
Hmmm.
Makes me wonder how these athletes ever go broke.
This is my thinking...
If someone had $1 million cash they can do 1 of the 2 following things to retire comfortably:
1st.
Buy 8 houses cash for 100k each. These will be in nice / decent neighborhoods with rentals in the $1,250/month range. Rent them out. 8 rentals at $1250/mo will net you 10k/month = 120k/year. Pay a management company to take care of them so that you never have to deal them. You write off the depreciation so ALL income is NET. So you'll have 120k/year NET to live on (that's like 160k GROSS), plus a 200k cushion in the bank never to be touched except for emergencies.
2nd.
Buy into apartment complexes (800k divided amongst 2 or 3 apartment properties) and collect payouts NET $$$ every month, and equity cash-outs NET $$$ every couple years. More to it than that but it can all be learned.
These are real numbers based on the Houston market and it has retired several colleaques in the past couple years. Pretty safe and higher returns than 99.9% of other investments. And if you can't live well off of this then I guess use 2 million as the example and double all of the numbers above.
Make sure you support a few good charities...
Yes, you are 100% correct. Taxes, ins, etc must come out...I figured you were talking about some sort of real estate investing when I saw that the rate of return needed to make your example work was 12%.
I'm thinking the rate of return will be somewhat less than 12% in the example you gave because you have to consider taxes, insurance, maintenance, management fees and occupancy rate. Not to say that 12% isn't possible.
Thanks though.
More to think about ....
You folks are some bright people with heads on your shoulders. Glad to see brothers talk real business. :tup: