Smooth, straightforward narration for non-fiction
Description
Vocal Characteristics
Language
EnglishVoice Age
Middle Aged (35-54)Accents
North American (General)Transcript
Note: Transcripts are generated using speech recognition software and may contain errors.
Let stocks appreciate during your retirement years, Suppose you have $500,000 invested in stocks with an average dividend yield of 4% and an annual appreciation of 8%. For a total yield of 12%. Use 7% of that yield or $35,000 for current consumption with the other 5% for capital appreciation. That would boost the value of your portfolio to $525,000 next year. You can then spend 7% of that. In other words, your spendable income has risen by the amount of inflation And achieve an additional 5% appreciation during the following year. Over the long run, your spendable income will remain at $35,000 in constant prices and the nominal value of the portfolio will continue to appreciate enough to remain at $500,000 in real terms, as long as the stock market grows at the same rate as GNP the real value of your portfolio and your annual income will keep pace with inflation.