I am too old for this to do me any good, but food for thought for younger folks.
USUAL CAVIATS APPLY.
"Project $3 Million - July 2012 Results ....................................
"This portfolio belongs to a 27 year old.
PRIMARY OBJECTIVE:
Income replacement. ... The goal is to build an income stream that is ... reliable ... predictable ... and increasing. The income goal is $10,000 per month in retirement. A portfolio of $3 Million with a yield of 4% will accomplish that objective. Hence the title of this portfolio ... Project $3 Million.
STRATEGY:
To contribute $500 per month to the portfolio, look to earn 8.25% annually, compounded over 40 years (to age 65). The beginning value at the time of establishing these goals was $42,205.42."........................
He's lucky he started in 2009 and didn't get hit by the 2008 market crash.
I don't think he's considering taxes when he talks about making 8.25%. If he's in a taxable account he'll owe yearly taxes on his dividends and capital gains on any stocks traded.
If he's in an IRA, he'll owe full income tax on that $120K a year he plans to take out (current tax bracket is 28% if single).
I guess it would work best for a Roth IRA but he wants to put in $6K a year and the max for a Roth is $5K. Plus you have to qualify for a Roth and you can't use one if you make too much.
I do not remember what the tax status of the accounts are.
Regarding lower stock prices, he considers that a +. He is investing in co's that increase dividends consistently.
Reinvesting dividends in a down market increases the # of shares and accelerated the income stream. As I recall, if a co in his port stumbles to the point of reducing divedends he will drop them in his port like a hot potato.
oh yea, I think the 8% if during the growth phase in a deferred acc. and he is using 4.something for the income phase.
He had BP in his sons acc and held through the spill because he figured the time frame was long enough to work itself out. I think it did.
pineinthegrass wrote: He's lucky he started in 2009 and didn't get hit by the 2008 market crash.
I don't think he's considering taxes when he talks about making 8.25%. If he's in a taxable account he'll owe yearly taxes on his dividends and capital gains on any stocks traded.
If he's in an IRA, he'll owe full income tax on that $120K a year he plans to take out (current tax bracket is 28% if single).
I guess it would work best for a Roth IRA but he wants to put in $6K a year and the max for a Roth is $5K. Plus you have to qualify for a Roth and you can't use one if you make too much.
Here is an update from dad. The full post includes his taxable/tax deferred thoughts.
"PRIMARY OBJECTIVE:
Income replacement! ... The objective is to start earning an income stream now, to replace the income that will be earned throughout the working years. The goal is to achieve $10,000 per month income in retirement. The income stream will need to continue to grow to stay ahead of inflation. A portfolio of $3 Million with a yield of 4% will accomplish that objective. Hence the title of this portfolio ... Project $3 Million.
MISSION STATEMENT:
To earn an income stream that is reliable, predictable and increasing.
STRATEGY:
To focus first on the safety of the dividend, then to focus on the growth of the dividend, and then to focus on total return. The formula to be used to put this strategy into effect is:
HIGH QUALITY + HIGH CURRENT YIELD + HIGH GROWTH OF YIELD = HIGH TOTAL RETURNS.
TACTICS:
To contribute $500 per month to the portfolio, look to earn 8.25% annually, compounded over 40 years (to age 65). The beginning portfolio value at the time of establishing these goals was $42,205.42.".......................
LOL wrote: We need a stock market and investing forum here. Non-political. I used to follow yahoo finance message boards, but they are full of spam and BS
:VeryScared: I have never found anything of use at yahoo msg boards.
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