Mixing Helpfulness and Humor Since 2005

Tuesday, October 24, 2006

Endowment Tip of the Day

Wait wait wait, don't skip this tip thinking its like all those emails you get that use the word "Endowment". It has nothing to do with that.

Wouldn't it be cool to have your own endowment? Like where you could just live off the interest you already had? Well it turns out the magic number is 8%. If you can live off of 8% of your money, you could be all set. Here's how that works. Its not hard to find Mutual Funds that have track records that average 12% ROI every year. Inflation averages around 4%, so factor all that out and you have 8%.

That's a little Dave Ramsey wisdom for ya. And as it turns out, that is your goal for your retirement fund. That way you don't have to count on dying soon. So say you wanted to live on $50,000. You would need $625,000 in good Mutual Funds. That doesn't sound so bad now does it?

3 Comments:

Blogger Amanda said...

Dave Ramsey rocks! I took the Financial Peace classes from church last year and it really helped me put things in order.

25 October, 2006 11:32

 
Blogger Andy said...

For anyone who has XM, Dave Ramsey is on channel 165 weekdays from 3 - 6 EST

Just FYI

26 October, 2006 10:50

 
Blogger Pete said...

Also worth noting that the first hour of the show is available in Podcast form without commercials, which makes it a convenient 40 minutes. Which is my personal favorite way to ingest it. Also, you can listen to the whole 3 hour show live online. Links to both those are here

26 October, 2006 11:10

 

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