Could you live off of a Million Dollars Cash?

[schamp]

A little different twist to the what would you do with a million dollars. The question is could you live off of a million dollars cash, actually, presented to you as stock? If you had no real bills, no debt, and home paid for, could you make it? And for how long? And before we get started, I have already thought about the Hookers and Blow til the dough ran out. Would you look to an anuity, utility stocks, (dividends) or just diversify the crap out of it? Thanks everyone, lets see where this goes. Schamp

[BK911]

I would buy houses and live off the rental income.

[Paul_Heery]

Interesting question. It really depends on what level of income you need to live/maintain your lifestyle.

As an example, to keep the math simple, if you need $50,000 per year to cover your living expenses and you did not want to deplete the $1,000,000, you would need a 5% return. If you wanted to grow the $1,000,000 over time, you would need a greater return.

Please tell me where I can get 5% guaranteed

[sc_rufctr]

You could but you would need professional help. And you'd be surprised at the new problems you'd have.

[ckelly78z]

With no real bills to pay for or debts to pay off, I would spend 10% ($100,000) on things that I wanted like a new vehicle, bahamas vacation, upgrades to home, etc.

With the remaining $900,000, I would take $800,000 and invest it in 5% gaurenteed safe return investments to ensure that I have $40,000 a year for my living expenses, and take the remaining $100,000 and have fun with speculative investments or commododities.

[GH85Carrera]

I don't know, but I would like to give it try. All I need is that million.

[mreid]

No, but I would try. My financial planner consistently says 5% is the number in order to preserve your capital ($1M in this case). That's $50k. He's already pointed out that I need $4M in order to preserve my lifestyle, but the house is paid off and I really have no bills so I'm not sure that is correct. Perhaps it's my wife's purse and shoe collection...

To Paul's question, of course there's no guarantee, but Fischer Investments made me over 10% ytd in 2012 and their running average is typically 2-5% above the S&P 500. That's a pretty good bet.

[id10t]

Give me a mill, I'll pay off all debts, invest the rest in an annuity, and keep on working my job.

[red-beard]

I'd do two chicks at once

[fred cook]

With $1M, you could buy 100,000 shares of Windstream stock (WIN) that pays $1 per year dividends per share. I would think that one could live fairly well on the $100k! Of course, that is just an example, as I am sure that there are other stocks that would do as well or better.

[red-beard]

Fred, I agree. There are a lot of stocks which pay 10% dividend.

Best High Yield Dividend Stocks, the best dividend stocks.

[Jim Richards]

I question of the long term reliability of the dividend yields being talked about here. Also, don't forget taxes on your dividends. My target for cash at retirement to carry me and my wife through until we're worm food is well over $1M.

[on2wheels52]

Cathy's retirement guy from the hospital says 1.5 would work well for us.
("no real bills, no debt, and home paid for" applies)
Jim

[Porsche-O-Phile]

I could for about 15-20 years I suspect, living a bit more modestly than present. I have a friend who won a million dollars in the lottery a few years back. His take after taxes was about $37k a year. That's nice but certainly not enough to retire on. In this hypothetical of a cash payout one would be on the hook for at least a 20% loss to the tax man so you're down to $800k at best. Not a lot especially with currency devaluation underway and investment RoRs in the dumper. I figure with good planning one could stretch it 15-20 years at best but one would be awfully foolish to think they can just kick back and live off of it in perpetuity - far wiser to supplement with some additional earned income to make it go a lot further which is what my friend did.

I think the magic number is about $4M to not have to work again and expect to live off of it okay.

[jcommin]

Could you live off of a Million Dollars Cash????


Not sure but I would like to try. The interest and dividends might just cover medical expenses and supplemental insurance premiums.

[Monza_dh]

Depending on where you live just one million would be tough for the long haul especially with a family. Here in the NE real estate taxes, heating bills, auto, home, health insurance, food/gas prices all eat into your available net worth. I would think moving to a cheaper place (South America maybe) and living alone wouldn't be an issue but then the wife gets half!

Realistically I think the average person would ned $3-5+ mil to never work again and live comfortably.

[sc_rufctr]

Think of it this way... Could you live off $50,000 a year? (no dept, house paid or etc) Of course you could.
So invest in something SAFE that returns $50,000 a year after tax. Not so easy when you really think about it.

A million dollars is not a whole lot of money. In fact it's just enough to get into trouble

[widgeon13]

Originally Posted by red-beard

Fred, I agree. There are a lot of stocks which pay 10% dividend.

Best High Yield Dividend Stocks, the best dividend stocks.

If you buy shares of MMM with the million $$ the stock is currently trading at approx $90 per share, that 11,000 shares that generate approx $2.36 per share. That is only $25,000 per year. Who wants to live on $25K a year.

You can diversify but don't think it will increase the amount that much.

You also have to pay cap gains tax, currently at 15% and soon to go higher, so now the 25K is down to $21,250.
A mil doesn't get you very far these days.

[red-beard]

There are stocks on the list paying as high as 19%

There are 4 pages....

[Jim Richards]

Originally Posted by red-beard

There are stocks on the list paying as high as 19%

Guaranteed for the rest of your life?