https://www.patreon.com/Jellyman_Investing
In the previous example, we went through some basics of retirement planning. However, there is a considerable flaw in the previous model. That is, it assumes you have to sell all your stocks at age 70 and then with discipline, not spend it all too quickly. Let's solve that problem.
The way I described it previously isn't exactly how you want to do it. But I wrote it that way so you have a basic idea. What we've done is purchase a basic Toyota Corolla. No addition, no customizations, nothing. It's completely plain.
We can now consider modifying it in the ways we need.
Investing in the way I mentioned has something we call an infinite money glitch. One of the biggest fears people have is running out of money in old age. This method will solve that.
So assume our yearly return is 10%. If we have $1M in stocks, by the end of the year, it will grow by 10%. Our stocks are now worth $1.1M. Say we sold $100k worth of stocks to live off. That leaves us with $1M once again. What happens at the end of the next year?
Well assuming it again grows by 10%, then the $1M grows again to $1.1M and on and on it goes.
This has a few assumptions though. Firstly, it assumes that you're not spending more than $100k. Secondly, it assumes we'll get 10% growth. Thirdly, it assumes to no extreme situation such as needing experimental surgery costing $500k. Fourthly, we're not accounting for inflation.
What happens if it only grows by 5% and we also solve $80k worth over the next 10 years? The stock grow to $1.05M, we'd sell $80k leave us $970k.
Say this happens again the next year. Our stock price would grow to $11.02M, we'd sell $80k leaving us with about $939k. As you can see, if this continues we'll run out of money.
So the key here is ensuring the growth on your portfolio is greater than your expenses. But done right, it's infinite money baby!
https://www.patreon.com/Jellyman_Investing
In the previous example, we went through some basics of retirement planning. However, there is a considerable flaw in the previous model. That is, it assumes you have to sell all your stocks at age 70 and then with discipline, not spend it all too quickly. Let's solve that problem.
The way I described it previously isn't exactly how you want to do it. But I wrote it that way so you have a basic idea. What we've done is purchase a basic Toyota Corolla. No addition, no customizations, nothing. It's completely plain.
We can now consider modifying it in the ways we need.
Investing in the way I mentioned has something we call an infinite money glitch. One of the biggest fears people have is running out of money in old age. This method will solve that.
So assume our yearly return is 10%. If we have $1M in stocks, by the end of the year, it will grow by 10%. Our stocks are now worth $1.1M. Say we sold $100k worth of stocks to live off. That leaves us with $1M once again. What happens at the end of the next year?
Well assuming it again grows by 10%, then the $1M grows again to $1.1M and on and on it goes.
This has a few assumptions though. Firstly, it assumes that you're not spending more than $100k. Secondly, it assumes we'll get 10% growth. Thirdly, it assumes to no extreme situation such as needing experimental surgery costing $500k. Fourthly, we're not accounting for inflation.
What happens if it only grows by 5% and we also solve $80k worth over the next 10 years? The stock grow to $1.05M, we'd sell $80k leave us $970k.
Say this happens again the next year. Our stock price would grow to $11.02M, we'd sell $80k leaving us with about $939k. As you can see, if this continues we'll run out of money.
So the key here is ensuring the growth on your portfolio is greater than your expenses. But done right, it's infinite money baby!