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So recently I've become very intrigued by investing in various markets and have been educating myself on it over the past several months. I find the subject matter to be very interesting and enjoy researching markets, companies, etc. I also hold a master's degree in accounting and thoroughly enjoy dealing with numbers, analysis and tracking the performance of investments, etc. So, my question is this:
Is it possible to live entirely off of income from interest, dividends and capital gains? This means I would eventually quit my regular full-time job and shift entirely to researching markets, monitoring investments, retaining gains and living off of it. Is it possible to make, say anywhere from $50K to $100K per year this way? Has anyone done this in recent years?
I was thinking of doing it on the side, while I have my day job, and gain experience with investing and trading. Then, after several years or whenever, I could be earning enough money to live off of that income and have the financial freedom that I desire. I wouldn't mind working at home up to 40 hours a week if I spent all my time researching, calculating investments, etc. I would enjoy it.
You'll need a large pool of money invested in a moderately conservative asset allocation..
Example: the following asset allocation is doable assuming you have $1 million invested and are disciplined enough to stick with a budget:
25% S&P 500
25% Long Term Treasures
25% Gold
25% Cash
Other popular asset allocation is 60% S&P 500, 40% Long Term Treasuries.
There are a ton of articles on asset allocation.. I'd start there rather than figuring out what stocks to put in a portfolio designed to provide living expenses.
So recently I've become very intrigued by investing in various markets and have been educating myself on it over the past several months. I find the subject matter to be very interesting and enjoy researching markets, companies, etc. I also hold a master's degree in accounting and thoroughly enjoy dealing with numbers, analysis and tracking the performance of investments, etc. So, my question is this:
Is it possible to live entirely off of income from interest, dividends and capital gains? This means I would eventually quit my regular full-time job and shift entirely to researching markets, monitoring investments, retaining gains and living off of it. Is it possible to make, say anywhere from $50K to $100K per year this way? Has anyone done this in recent years?
I was thinking of doing it on the side, while I have my day job, and gain experience with investing and trading. Then, after several years or whenever, I could be earning enough money to live off of that income and have the financial freedom that I desire. I wouldn't mind working at home up to 40 hours a week if I spent all my time researching, calculating investments, etc. I would enjoy it.
Nice question. I am in same situation as You! I already give up on my job and now doing full time research
It definitely depend how much you can invest. I am not sure about few millions but let say if you have one million then making 5-10% per year is quite possible I think.
Yes it is and many people do this. It's basic algebra. You need to come up with a return that seems realistic to you though.
Let's say you believe you could make a 5% return and you would like to make $100k per year. How much money would you need to invest to make $100k per year if your annual return is 5%?
Just don't fall for the 25% in gold or ANY money in the lousiest treasury bond rates of our lifetime. Choose higher dividend high quality stocks and be patient. Live off dividends, not capital gains that are unreliable in their timing.
Just don't fall for the 25% in gold or ANY money in the lousiest treasury bond rates of our lifetime. Choose higher dividend high quality stocks and be patient. Live off dividends, not capital gains that are unreliable in their timing.
Dividends can be cut and are tax inefficient.. still if you wish to go with that, pick a high dividend fund rather than picking stocks that you do not have a thorough understanding of.
I would not pile all of my money in gold or long term treasures by themselves.. but through the use of modern portfolio theory, one can construct a diversified portfolio that incorporates those and makes more efficient use of risk to generate higher absolute returns over the long term.
Sounds like I would have to come up with a LOT of money to invest in (at least $1M). I don't even have 2% of that right now.
Unless you can literally end up in the Guinness book of world records with your mad Day Trading skills, you will need to have a career to make your first million.. THEN we can talk about living off of your investments.
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