Read? Can Dividend Investing Support AVERAGE Retirees Over Decades Of Inflation In Their Retirement Lifetime?
For every $10K of annual household expenses; FIRE or retire will need to accumulate this level of capital to invest @ 5% yield and also re-invest the surplus balance of dividends @ 5%; and assuming 2.5% yearly inflation.
20 years - $274K
30 years - $301K
40 years - $320K
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If one only has average income, the objective should always be to FI, and not RE. But FI does provide flexibility to take an "easier job" and eases (not removes) worries of future retirement adequacy. Early Retirement for average income workers is only possible provided that they are happy to endure extreme frugality their whole life. Which in my opinion is not worth it.
ReplyDeleteJoin FI folks and not necessary FIRE. We love options and free to choose our options.
DeleteI think the other important success factor is to have a portfolio of dividend stocks that have DPS grow.
ReplyDeleteDPS grow at 2~3% grow is sustainable. It acts as a hedge against inflation.
With the DPS growth, very likely that the share price will increase overtime, and resulting to capital gain (unrealised).
Agreed on dividend growth investing strategy option
DeleteWhat happen to capital at the end? You assumed it is left as legacy or donated to government
ReplyDeleteBetter strategy or model is dividend investing with later years of asset draw-down to X as legacy or donation
Delete