Post by thekindercarebear on Nov 21, 2024 4:56:41 GMT
is this woman on crack?
i need to sell more books and eat less pancakes. :(
Orman was asked whether $3 million, paired with a conservative 3% withdrawal rate, could fund a secure early retirement. Her response? A flat-out no. She didn't even hesitate to poke holes in the idea, calling $3 million "far from enough" for the unexpected costs life can throw at you.
The host, Paula Pant, asked Orman, "What would be a safe amount at which a person can say, ‘All right, at this point, given the size of my portfolio, I’m comfortable enough that if I did get hit by a bus, I would be fine.'?"
Orman answered, "It would have to be in the millions." Pant, wanting a clearer answer, pressed further: "How many million?" That's when Orman started doing the math – it wasn't pretty.
"It depends where you live, what your expenses are," Orman said. "Do you own your home outright? So, what are your expenses? But just think about it logically."
To generate $350,000 annually after taxes without touching your principal, Orman said you'd need a portfolio yielding at least 5%. That means a whopping $10 million in assets, if not more.
"Even if you have $1 million right now and you're getting a 4% yield, that's $40,000," she pointed out. "So you need at least $5 million, $6 million. And that's before tax. So you need a 5% after-tax yield in municipal bonds to get you $300,000."
Orman's conclusion? "You might need $10 million, just so if you're making 5% on that money after tax, you'll be fine without touching your principal."
The host, Paula Pant, asked Orman, "What would be a safe amount at which a person can say, ‘All right, at this point, given the size of my portfolio, I’m comfortable enough that if I did get hit by a bus, I would be fine.'?"
Orman answered, "It would have to be in the millions." Pant, wanting a clearer answer, pressed further: "How many million?" That's when Orman started doing the math – it wasn't pretty.
"It depends where you live, what your expenses are," Orman said. "Do you own your home outright? So, what are your expenses? But just think about it logically."
To generate $350,000 annually after taxes without touching your principal, Orman said you'd need a portfolio yielding at least 5%. That means a whopping $10 million in assets, if not more.
"Even if you have $1 million right now and you're getting a 4% yield, that's $40,000," she pointed out. "So you need at least $5 million, $6 million. And that's before tax. So you need a 5% after-tax yield in municipal bonds to get you $300,000."
Orman's conclusion? "You might need $10 million, just so if you're making 5% on that money after tax, you'll be fine without touching your principal."
i need to sell more books and eat less pancakes. :(
