I want to build up a private income from stocks and bonds. Specifically,

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Anonymous
2016-01-27 13:36:54 Post No. 1063296
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Anonymous 2016-01-27 13:36:54 Post No. 1063296 [Report]

I want to build up a private income from stocks and bonds.

Specifically, I'm buying for dividends and coupons, not for appreciation of stock or bond value.

As far as I can tell, 5% is an average annual return.
I would reinvest three fifths of the return to counter inflation, then keep two fifths as income.

I am obscenely patient, which is just as well, because I have to start small.
I want to establish an inflation proof income with the value of $1 per day. Then I'll do it again, and again, and again. But baby steps.

Based on my figures, $365 per year represents two fifths of a 5% return, so I would need $18,250 (100%) in capital to get it.

So, suppose I had 18K. Where and how in the USA or the EU should I invest it to get reliable 5% return?

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Anonymous 2016-01-27 22:39:43 Post No.1064238
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Anonymous 2016-01-27 22:39:43 Post No.1064238 [Report]

>>1063296
7.7 is the s&p return over time, dont go for dividends, buy stocks and sell the gains and just pay the asmall 15% capital gains tax and you'll be a few % ahead of things over time (go play with a compound interest calculator and see what 1% does over 20 years when youre talking real money)

So going from lets call it a 7% return, with you having to reinvest 3% to hedge against inflation (you said youre being conservative) that leaves you 4% drawdown from the nestegg per year

meaning for every 1 dollar a day you earn you need 9125 dollars in the nest egg.

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Anonymous 2016-01-28 10:59:26 Post No.1065271
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Anonymous 2016-01-28 10:59:26 Post No.1065271 [Report]

>>1064238
Selling sounds like a headache. I'd much rather just buy something evergreen and forget about it.