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?
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?
Comments
Just FYI